While more women than ever before are entering the work force and building careers of their own, their financial literacy is still often outdated. Here are five points to think about concerning financial planning for women.
Reason No.1:
There are still a large number of married women today who are completely uninvolved in the financial aspects of they and their partner’s lives. Being uninvolved can be financially devastating if something happens to the partner, and oftentimes will leave a woman with little or nothing to live on. When considering responsible financial planning, each woman should know where all her financial records are and what her and her family’s situation will be should anything happen.
Reason No. 2:
Women often out-live men by an average of five years. When you factor in the statistics around divorce along with widowhood, the chances that a woman will be living out her retirement as a single adult increases significantly. How does this affect financial planning for women?
Living longer means that you’ll need more money in your retirement nest egg than most men will. In fact, you’ll need to think very differently about your retirement money than men do. To see why, let’s take a look at the next reason for thinking about financial planning for women.
Reason No. 3:
Women are more likely than men to take time off to raise a family or maintain a household. This means that women, who still statistically earn a smaller salary than their male counterparts, will be out of the workforce for several years.
This has two negative effects on financial planning for women: the first is that women are usually eligible for only seventy percent of the social security benefits that men are; and two, the fewer years that women work, the less money they can contribute to their retirement fund.
Reason No. 4:
Taking this time off to raise a family means that there’s another aspect to financial planning for women that needs to be considered: employability. Stepping away from the workforce for a few years means that women need to find a way to stay viable career-wise, all while tending to their children.
Reason No. 5:
Many women will often take lower-paying part-time, or work-from-home jobs in order to have more time for their family and household. In this scenario, you and your partner need to discuss how to contribute enough money to ensure that you’ll still have the retirement money you’ll need in the future.
Sound financial planning for women is crucial to living a financially stable life – both before and during retirement. It’s up to you to take the reigns and direct your own financial future, even if you’re currently being supported by your life-partner.
