In this article, we will explore the financial planning challenges that women should address differently than men to protect not only themselves but also their families.
Women face unique financial challenges such as the need to care for others (sandwich generation), the gender pay gap, longer life expectancies, and shorter career spans.
We will discuss three specific areas of financial planning that women should focus on: insurance, retirement planning, and emergency savings.
Firstly, it is important for women, in particular, to maintain adequate life insurance. Women contribute necessary income, even when they are not the primary household income earner.
Stay-at-home moms’ contributions should not be underestimated as they provide valuable services to support their family. In addition to life insurance, women’s longer life expectancies mean they will likely face higher lifetime medical expenses and be more likely to need long-term care at some point in their lives.
That’s why it’s even more important for women to maintain adequate health and long-term care insurance.
Secondly, retirement planning is a critical area that women must focus on. On average, women in the United States live five years longer than men. This means that a woman who intends to live on $80,000 per year will need access to $400,000 more than an average man.
Because their lifetime income is typically less than that of men, women may need to save a higher percentage of their salary for retirement. Women's savings, investing and retirement planning strategies must be carefully designed and managed.
Women who may shoulder more of the cost of their children’s college tuition or in assisting with the caretaking of their parents may leave them with less income of their own toward their retirement goals. Therefore, the earlier women start planning, the more likely a successful strategy can be engineered.
Thirdly, women are more likely than men to experience time out of the workforce, often because they’re caring for children or aging relatives. Therefore, it’s vital for women to have a source of emergency savings. You should plan to have at least three to six months of living expenses saved in a liquid, easily accessible account.
This money can come in handy should you face an unexpected situation that requires you to leave your job for a period of time. It can also prevent you from needing to sell out of your investments at an inopportune time, should an unplanned expense arise.
Regardless of your unique situation or goals, there are two things all women should take to heart when saving and investing.
The first is to not be afraid to ask questions and seek guidance.
The second is to stay informed. Even if money doesn’t interest you, be educated and plugged in!
Ascendant 360 Wealth Advisors help women navigate their unique financial challenges and achieve their long-term goals. They focus on providing you with the confidence and security of knowing that the actions you take today will help to secure your future.
Always consult with your financial advisor or tax consultant prior to taking any actions.
The commentary provided here is solely for general information purposes and should not be interpreted as legal, tax, or investment advice, nor does it establish an attorney-client relationship. It's important to note that past market performance is not a guarantee of future results. While the information presented has been gathered from reliable sources, it is not guaranteed.
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