21 Aug Why Financial Planning Is Important for All Women
Because women have been historically underserved in the financial industry, it’s important that you seek out financial planning assistance early and often. Even if you think you’re adequately preparing for the future, remember that catastrophes could change everything. Even the smallest of life changes now could affect your financial freedom during your retirement years.
If you’re still putting off visiting a financial advisor, here are some more reasons to consider making an appointment today.
The Retirement Account Gap
Men are more likely to have retirement account balances more than 50% higher than women’s. According to Time magazine, this isn’t because women are bad at saving money. On the contrary, women are more likely to have a 401(k) plan, and they’re likely to save up to 16% more of their income than men.
So, why the gap? Well, women typically earn less than men. It makes sense that a smaller income amounts to smaller savings. Also, women are often the ones to take time away from work to care for children or aging parents, again resulting in lower wages.
In many cases, women rely on their husbands to maintain the retirement and savings accounts, only to be left with nothing after a divorce. While even a seemingly fair divorce settlement could equally divide the assets, we then return to square one on a woman’s ability to save for the future.
In many cases, women will also bear a higher financial burden after a divorce, specifically if there are children or aging parents involved. Their role as the caregiver leaves them less time to earn an income, which results in lost savings abilities.
Lack of Investment Knowledge
While women tend to save more money, they’re less likely to make investments. Cash on hand is important in the case of an emergency, but investments offer the opportunity to turn small sums of money into large ones.
Don’t make the mistake of reserving too much cash. Find safe investments, make informed decisions, and work with a professional to ensure you’re getting the most for your money. When the time comes that you need that money, it will be there for you.
If this all seems dark and dreary and hard to overcome, have no fear! Women are taking hold of their fair share, and the numbers will improve in time by a natural course. After all, women currently control up to 85% of household spending. That puts them in charge of more than $5 trillion, in the United States alone.
All it takes for women to master that control is to simply take it. Make an appointment today to start planning for your future.