Financial advice for women: What to consider as you age

You’re likely aware of the struggles women commonly face throughout their lives. Just a few of those affecting their financial health include:

• The gender pay gap
• A longer life expectancy than men
• Filling multiple roles at once professionally and personally
• The issue of adequately saving for retirement

The good news, however, is that we women can take control of certain variables to better navigate and prepare for aging with greater confidence in our finances. Take a look at the financial advice for women below.

Knowledge is power

Statistically, around one third of women in the U.S. will find themselves single at some point after the age of 65. In Canada, 68% of seniors living alone are women.

It’s imperative that women, regardless of their age, have the knowledge and resources to feel secure in their financial wellbeing in all seasons of life.

It has been said that knowledge is power and wisdom is understanding. 

Unfortunately, many women lack a basic knowledge of their financial situation. Reasons for this vary:

• Perhaps they have a partner who chooses to handle all decisions related to finances
• Maybe they have no personal interest in financial topics
• Perhaps the division of duties in their household means they are at capacity and don’t have time to take on financial matters

The reason for their lack of involvement isn’t nearly as important as them understanding that our financial wellbeing is as important as our physical, spiritual, and mental wellbeing. 

Of course, monetary wealth is not the end all. But it is a vehicle to provide the independence and freedom that most of us strive for. 

If you’re reading this and feel overwhelmed or even ashamed for not being as engaged in financial matters as you might hope to be, I urge you not to be. 

When we know better, we do better. 

And change begins with taking just one step towards greater understanding. To help you get started, here are a handful of questions for you to answer:

• What are the most important financial questions that you need to know the answers to if your partner is not available due to divorce, death or declining health?
• Does your spouse or partner have life insurance? Are you the beneficiary of that policy?  
• Are you aware that the owner of a life insurance policy can change the beneficiary of a policy at any time without spousal permission?  By contrast, the primary beneficiary on a 401-K plan  cannot change from a spouse without that spouse’s notarized signature.
• Could it help you financially to continue working past the typical retirement age?
• How do you consider future health expenses as you plan for retirement?

As an advisor, I have seen firsthand how not involving yourself in finances can later be detrimental. Following the financial tips below can help you feel more in control.

Start keeping records now

Advancements in technology mean we are living in a mostly paperless world. 

For the sake of our environment, of course, this is a positive change. 

However, if any of your accounts are only accessible online, this can later present a challenge. 

For example, let’s say you have an IRA online, but don’t meet the minimum age to take your required minimum distribution (RMD). 

There likely will not be an income tax form from the prior year’s income tax returns to help you locate the account. This is when hard copies of statements can be beneficial.

If your spouse dies unexpectedly, it can be difficult to ascertain what accounts there are, how much is available — or even figure out if you are the beneficiary. 

For this reason, I encourage:

• All clients to print out a year-end statement of each of their accounts and keep them in a file that their spouse, partner, child or main contact person is aware of and has access to
• Couples to sit down regularly to discuss their finances, even if one partner handles the day-to-day bill paying

Of course, this financial advice isn’t just for women – it applies equally to men.

Two steps for more control

So what are some actionable steps to take to ensure you’re aware of your own financial situation and on track to meet your specific financial goals? Start here:

1. Create a net worth statement that includes all of your checking, savings, retirement accounts as well as any other investment accounts. You might create this in a spreadsheet so that you can update the information periodically to track your progress.
2. Create a budget if you don’t already have one. Categorize your expenses, separating essential monthly bills from your discretionary (optional) spending. Your optional spending is where you can adjust the outflow. 

If you have debt on your net worth statement, you need to note what type of debt it is (mortgage, credit card, etc)  as well as indicate what interest rate you are paying for that debt. As interest rates have risen in the last two years, it is not uncommon for those minimum rates to be over 20%. 

If you have credit card debt, you’ll want to pay it off as soon as possible.

There are a number of apps/websites that allow you to create a budget online and link to your financial institutions. 

Don’t be afraid to ask for help

If you find you’re still struggling to pull your financial information together, hope to learn more about where you stand in terms of retirement, or need guidance in achieving your personal financial goals, consider working with a financial advisor. 

We would be happy to partner with you and give you the tools to feel confident, capable, and hopeful for your financial future.

Aging is a gift. Give yourself the opportunity to fully embrace and enjoy it by resolving to better understand your financial present so you can look forward to your financial future.