By Judy M McCutcheon
Women live longer than men on average and they typically earn less, furthermore they may have limited access to retirement benefits to offset their lower wages. Women are also likely to face more economic and social challenges than their male counterparts. So, what’s a girl to do?
Both men and women need to save for retirement; they both need to make long range planning a priority. Unfortunately, women tend to be worse off – they tend to be less prepared for retirement. Research suggests that older women are more likely to fall below the poverty line. There tend to be greater demand on a woman’s resources as she gets older; for one thing women are the primary care givers for aging parents. A lot of marriages are now ending in divorce and because women tend to live longer, they need to plan for the possibility of being alone. So women’s ability to effectively plan and prepare financially is severely compromised, and the need for those financial resources are greater during the retirement years. Women are well advised to double up on their savings for retirement.
Women are nurturing by nature, and so they have a tendency to care for everyone else. I have an analogy that I use when I want to show people the importance of caring for themselves and those who know me personally can attest to this: one of the instructions on an airplane is that if the cabin loses, pressure, you are to secure your oxygen masks before helping others. You are no good to anyone if you don’t take care of yourself. Put yourself first when it comes to planning and preparing for your retirement. It is not a selfish act to make self-care a priority. Remember, retirement is real and so are the dangers of not planning adequately for it. Ensure that you have a pension plan that guarantees you income for life.
All financially secure people have one thing in common – they make saving a priority. After you have covered all your fixed and variable monthly expenses, you should put a fixed amount into an interest bearing savings account. This amount should be non-negotiable. One suggestion is to have that amount deducted at source and deposited directly, the idea being that you can’t miss what you never had. The amount accumulated in this account should be no less than three to six months’ worth of expenses; this money should be used strictly for financial emergencies. Vacations, clothes, shoes etc, are NOT emergencies.
Ensure that you and your family are adequately protected. Have appropriate life, health, general and auto insurance and also any applicable liability insurance. Astronomically high medical bills are a sure way of eroding any wealth accumulated. Once you have your pension plan securely in place and you have monies in excess of your emergency plan, start investing. Find a secure investment, put a fixed amount in every pay day and begin accumulating your wealth.
Finally, make sure you have a will in place. Don’t be afraid to plan with the end in mind. You want to ensure that the wealth you have accumulated is spent and distributed exactly the way you want it to. You may also want to review annually your beneficiaries and guardians for any young children.
No matter what age or stage you are in life, building a solid and secure financial future is always desirable. It makes no sense to live like the Joneses; rather it makes perfect financial sense to live within your means. Make savings a top priority starting now.