A four-part series of the challenges that women face when it comes to planning for a secure financial future and investing to make that plan happen.
This is the second article in a series on Women Investors.
The statistics are sobering – over 80% of women will be solely responsible for their finances at some point in their life. Increased longevity and rising divorce rates for women over 50 means that women have special financial needs and concerns.
Longevity is a big issue since women have an average life expectancy of 81, five years longer than men. A study by the Society of Actuaries (SOA) showed that on average, women anticipate living slightly longer than men, but also showed that half of pre-retiree females underestimate the life expectancy of the average 65-year-old woman.
- Women are likely to face greater financial challenges in their standard of living after divorce or the death of a partner.
- Women can also be at a disadvantage in their knowledge and experience in dealing with their finances.
The SOA study also showed that women are more concerned than men about paying for long-term care, depleting their savings, keeping up with inflation, and maintaining their standard of living.
- Women more likely to need help with health care issues and managing their daily lives later in retirement.
- Women are more likely to be subject to elder abuse because of their longer life expectancy and need for care.
With these statistics in mind, we put together a quick list of ideas to help you start talking about your money, finances, and investments.
Women’s Finance Action Item #1
Get Rid of Debt
Get rid of consumer debt (credit cards and loans), especially those with high interest rates. Paying off your mortgage by retirement can give you flexibility if you need to cut back.
Women’s Finance Action Item #2
Save More, Save Early
Save as much money as you can. If you are in your early career stages, start saving as soon as possible. Increase the amount you save every year when you get a raise or bonus. If you are closer to retirement, start living on your targeted retirement spending now so you can see if it fits your needs
Women’s Finance Action Item #3
Plan for Healthcare
Make a plan for health expenses, incapacity, and long-term care needs later in retirement. Investigate long-term care insurance to see if putting a policy in place makes sense for your needs, desires, and budget. Planning is critical if you want to remain in your home, since in-home care can often be the most expensive option for care in later years.
Women’s Finance Action Item #4
Be Bold, Get Involved
If your partner takes care of the major financial decisions, get more involved. Do you know where to find key documents and how to access your accounts? Know where you stand financially and take an active role in discussions and decisions about your investments.
Women’s Finance Action Item #5
Consult a Professional
Consult a financial professional that can address your concerns about being prepared for retirement. Make sure your plan addresses the longevity and health care needs that women are more likely to face.
Sources: National Vital Statistics Reports, Vol. 68, No. 9, June 24, 2019. Society of Actuaries 2017 Risks and Process of Retirement Survey Report of Findings, January 2018.
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Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary meeting. 619-255-9554.