What Women Need to Know
Women need to take special care when it comes to their finances. A couple of common facts about women and their financial health may influence your future.
Women, on average, live five to seven years longer than men. This means the time horizon you plan for needs to be specific to you, not to a couple. Older women are one of the fastest-growing poverty segments.
Women typically make less money. For all the improvement of women's rights, women still earn about 75 cents of every dollar that men earn.
Because of this, here are a few tips to consider for your financial future:
Proactively save for your retirement
On average, women stay home 12 years with children instead of working outside the home. So they are less likely to participate in a company-sponsored retirement plan. Stay-at-home moms can, however, participate in a spousal IRA, which can be established either as a traditional or a Roth IRA.
Society pressures us to spend, not save. Consider setting up a periodic investment plan (PIP). A PIP is an automatic purchase plan, usually of a mutual fund. Once you do the paperwork, money is deducted automatically from your account.
Learn the basics of financial management and investing. Take a class through a reputable source where the instructor is not going to try to sell you products. Look to your local community education or college. Read books.
Don't passively delegate the investment of your money to someone else. Ask questions and expect to understand the responses. Don't be intimidated by jargon. Ask them to explain their response to you differently and to your satisfaction.
Have a trusted professional
The key word is trusted. Do your due diligence. Ask other women for recommendations. Look for a qualified individual. Professionals in the field of financial planning usually will have the CERTIFIED FINANCIAL PLANNER™ designation, although many other reputable designations are out there. Interview several professionals to get a sense of who speaks your language and whom you are comfortable with.