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Why is it so hard for millennial women to save for retirement?

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Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

Why is it so hard for millennial women to save for retirement?
While retirement saving is tougher for women than for men due to income inequality, millennial women’s savings behavior in particular prevents them from saving as much as their male counterparts, according to this article in MarketWatch. To remedy this imbalance, an expert says that millennial women should start saving in their retirement plans as early as possible and take advantage of the employer match, contributing at least 15% of their income. “When you’re starting out, you probably can’t do all of that, and that’s OK, you can start at a lower amount, and ramp that up over time. The greatest asset you have is time. And that compounded growth can really be magic.”

4 steps to build an emergency savings fund
As the year winds down, clients should prioritize building an emergency fund to prepare for unforeseen expenses next year, according to this CNBC article. To do this, they should create a budget, automate money transfers to their emergency savings account and manage their financial goals by shoring up the fund in stages. Those who want to generate better returns from their savings can put the money in a Roth IRA or a taxable brokerage account. These vehicles offer better returns than cash and make the money readily accessible when needed.

This factor could undermine clients’ retirement savings plan
Clients should account for the impact of inflation on their savings, as price increases can reduce the purchasing power of their money by the time they retire, according to this Motley Fool article. To protect their savings against inflation, clients should avoid sitting on cash, contribute to a tax-advantaged retirement account and make the most of their employer's match. They should also fund a health savings account, adopt a long-term approach to investing and consider inflation-protected funds.

While these 20 dizzying changes will throw some for a loop, financial advisors and their clients grow more powerful each year.
December 18

Retirement accounts clients should consider
While the 401(k) is the common retirement account workers use to build their retirement savings, there are other tax-favored savings vehicles that may be suited to their personal circumstances, according to this article in Yahoo Finance. For example, clients can open a traditional IRA or a Roth IRA, while business owners can set up a solo 401(k) or SEP IRA. Clients who are working for a nonprofit or tax-exempt organization can save in a 403(b) while state and local government employees can sock away earnings in a 457(b). Those who want to save for medical costs in retirement can contribute to an HSA.

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