KIRKSVILLE, MO -- What are some of the key differences between men and women?
1. Women have longer life expectancies. Women live an average of 4.9 years longer than men. This poses challenges, because they need to stretch their retirement dollars to cover a longer period of time, may need long-term care late in their life, and may have ultimate responsibility for their marital estate. This also means that women have a likelihood of living more years on their own than men.
2. Women generally earn less and accordingly have fewer savings. The wage gap can significantly impact a woman's retirement income and social security. Because a woman may have few dollars and a longer life to cover, this makes them more vulnerable to unexpected economic obstacles, such as job loss, divorce, or single parenthood.
3. Women are more likely to take career breaks for care giving. This may be to start a family, raise children, or to care for aging parents. Moving in and out of the work force, can cause 1. Lost income and employee benefits, 2. Less savings, 3. Lower Social Security, 4. A tougher time finding a job, and 5. Increase vulnerability in case of divorce or death of spouse. To balance work and family, women are more likely to request flexible or reduced work schedules.
What are some of the steps that women can take?
1. Take more control of their money. Engage in creating the budget, manage debt and credit wisely, determine the financial goals, and implement a savings and investment strategy.
2. Become knowledgeable about the risks. Consider risks such as inflation, which is the risk of future higher prices, market risk, which is the risk their investments will decline, longevity risk, which is the risk that they would outlive their money, survivor risk, which is the risk that you will be living alone. Consider these risks and others and then make sure you have some protection.
3. Become a knowledgeable investor. Learn about and become comfortable with the investing process and terms. Be willing to ask questions, admit mistakes, and seek help. Work with financial professionals that will help educate you about your investment choices and your risks.
4. Develop a plan for retirement. Be sure to develop a well thought out plan for your retirement years. Understand the cash flow streams that you will have in retirement. Also, be sure to understand your current cost of living and estimate what it will be when retired. We advocate that couples plan to spend two-thirds to three fourth of their life style in retirement. Often the development of a plan causes a couple to talk about retirement in a very meaningful way.
5. Create an estate plan. To ensure that your personal and financial wishes will be carried out in the event of your incapacity or death, consider basic estate planning documents, such as a will, trust, durable power of attorney, and health-care proxy. If it is your intention to leave money to others, your plans should reflect it.
Jeff Romine, Ph.D., CPA, Investment Advisor Representative
Financial Planners of Missouri
110 S. Franklin
Kirksville, Mo. 63501
(660) 956-9416
www.financialplannersofmissouri.com
Disclosure: Securities and Investment Advisory Services are offered through National Planning Corporation (NPC), Member FINRA/SIPC, and a Registered Investment Advisor. Financial Planners of Missouri and NPC are separate and unrelated companies. David Bethel, Jeff Romine, and Adam Bethel are Investment Advisor Representatives.
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