Why do so many women leave their financial future to chance? Why do women face so many challenges with their finances? If you could learn how to overcome your financial concerns, would you take action? After many years of working with women, either single, married, divorced, or widowed, I have found similar common denominators. Women don't get involved with their financial security. They leave it up to a myriad of other possibilities.
Women already face additional challenges that are unique to them. First, women have a longer life expectancy. According to a report from the Centers for Disease Control and Prevention the average life expectancy for a man is age 76 and for a woman it is age 81. That's a five year difference. U.S. Census data from 2000 shows there are four times more centenarian women than men. Which means retirement savings must last longer. With longer life expectancy comes the possibility of health issues and the need for long term care planning.
Next a woman earns about three quarters of what a man earns. US Census data also shows that women's median annual income is 77% of men's in 2010. This means they contribute less to 401ks, pensions and social security, resulting in less retirement savings to draw income from in retirement. They also have less discretionary funds to invest and save to sustain their lifestyles now and in the future.
Women also fall into the role of primary care giver taking more time off from their careers to fulfill care giving roles to either their children, elderly parents or a sick spouse. Less time earning income further reduces their ability to save.
Women tend to rely on their husbands to manage investments, balance budgets, and create financial plans. With the divorce rate at fifty percent, a woman could find herself single and not knowing where her money is or how much it is worth. Even worse, not knowing if her husband carefully managed the family assets or possibly squandered them away. For the widowed woman it may mean trying to manage her finances with little knowledge at a much older age after a lifetime of being out of the financial picture. Many women don't plan for the possibility that they may lose their husband's pension and other benefits. Either of these cases could come with detrimental effects.
Lack of financial knowledge ranks high on the list of challenges facing women. Traditionally women are not encouraged to educate themselves on financial issues. More than 70 percent of men say they have a good understanding of stock market basics, but less than 45 percent of women feel that way. This puts them at a disadvantage to their male counterparts. This lack of knowledge leads them to be more conservative, under utilizing stocks, bonds and other invests. As a result their long term returns and ability to hedge inflation are affected. Research released by HSBC showed that many women are not prepared for retirement, with just 24% of women in their fifties claiming to have a financial plan in place.
After learning about the challenges women face with their finances, do you want to leave your financial future to chance? What are you ready to do to overcome these financial concerns? Please consider taking charge of your future by working on a financial plan. Don't let a longer life expectancy, lower earnings, and lack of financial knowledge take you off course. Make a plan to take charge today!
About the Author:
Bill Leavitt is a Registered Investment Advisor, practicing financial planning and wealth management for single, widowed, and divorced women since 1994. He is the President of Senior Financial Advisors, Inc. in Orange Connecticut. Learn more here: http://www.sfainc.net.