Women have made great strides in entering the business world, whether it’s into a new business venture or as a corporate leader.
Women, however, still make less money then men and are more likely to leave the workforce to care for their children or aging parents, sometimes performing double duty by caring for both children and older relatives at the same time.
If women earn less money and lose personal income, as well as the opportunity to contribute to employer-sponsored retirement plans while out of the workforce, it is more critical for them to understand their unique financial needs, whatever their life stage.
According to 2008 US Census reports, women will live longer than men — on average five to seven years longer — and so experts suggest that they will need to set aside 20 percent more than men for their retirement plans. Since women make on average 80 percent of what a man does in the same job, accordingly they face a more daunting task of saving for retirement.
Women’s financial needs are different. Identifying this is the first step toward a meaningful financial future.
If women understand their current and future needs, and why they should have different concerns than men, they are much more likely to make financial decisions that will help them work toward their goals.
To get started, a woman should identify her financial goals. She should ask herself:
— How much money do I need to save for short-term goals, such as emergency funds, a new car, etc.
— How much do I need to save for long term goals, such as college for kids and retirement
— How much should I save each year; what kind of investments will help me reach my goals; and what is the potential risk and return of these investments
— How often should I review my investments, and when should I make changes
— Do I need a retirement plan separate from my spouse
— Do I have a will and an estate plan, and is it up to date
— Do I have provisions for the financial and physical care of my dependents, such as children and aging relatives, in the event something should happen to me or my partner
— Am I interested in charitable giving
Answering these questions is the first step in helping a woman decide where she wants to be financially, whether now, five years from now and in retirement.
Like men, women should place their goals in short, medium and long-term categories.
Then, work with a financial professional to develop a strategy that addresses all of these questions and provides a roadmap that will help you find your way, whether you are just starting out, building your family or planning retirement.
• This article is provided by Stacie Nishimura of AXA Advisors. She may be reached at 241-7701 or stacie.nishimura@axa-advisors.com.
