Financial Planning Concerns for Women, and the Retirement Questions to Ask Yourself

Men and women are different – and often, so are their financial planning needs.

At Montgomery Taylor Wealth Management, we specialize in helping women navigate their financial lives while transitioning to retirement, caring for aging parents or picking up the pieces after losing their spouse. Whether you’re a mother, daughter, professional, caregiver or widow, or maybe even all of the above, there are common financial issues that arise for different roles in life. Let’s take a look at some of these concerns as well as tips for overcoming them and the retirement questions to ask yourself in each situation.

Widows: Outliving Your Spouse

According to the CDC, the average lifespan for women is 81 years. For men, it is 76 years. This lifespan gender gap is due in part to lifestyle but biology also contributes to men’s shorter average lifespans. These factors combined lead to another statistic: About 80 percent of women outlive their husbands.

What this means for women is that they should plan to have resources to fund a longer retirement. It also means that they need to plan for life after the deaths of their husbands, because while certainly not all women will outlive their husbands, there’s no way to know for sure, and it’s important to be prepared.

This is more than about just having the money to pay the bills. It’s about knowing which bills need to be paid, how much is in each account and even how to access any accounts a couple may have. Throughout their lives, an overwhelming majority of women leave the financial day-to-day operations of their households in the hands of their husbands, which leaves many wives vulnerable, unprepared and scrambling in the event of their husband’s death.

To avoid this, get involved now. Have a conversation with your spouse about your family finances. Both spouses should feel capable and confident in stepping in if something was to happen to the other. It’s important to understand the ins and outs of your family’s financial management and have a plan for the “just in case.”

Both a husband and wife should participate in financial planning meetings and establish their own relationship with the family’s financial advisor.

At Montgomery Taylor Wealth Management, we work with many couples (and widows), and we see firsthand what can happen when a spouse is left in the dark. It can create a lot of stress and anxiety in a time of loss and sorrow.

Retirement Questions to Ask Yourself

  • Do I know who my financial advisor is and how to contact him or her?
  • Do we have a list of accounts, logins and passwords somewhere that I can access easily if something was to happen?
  • Do I know what bills we pay and when?

 

It’s never too soon to start planning for your future. Contact Montgomery Taylor Wealth Management to see how we can help.

 

Professionals: Wage Inequality

Although activists for years have battled hard to fight the gender pay gap, and tremendous gains have been made, on average, women still only earn 82 percent of what men earn. For minority women, the disparity is even greater.

In the U.S. alone, the gender gap costs women a combined total of more than $916 billion a year, which means women and their families have less money now, and less money for the future.

Even if the average woman saves the same percentage of her annual salary over her career as her male counterpart, and at the same rate of return, she will retire with less in her coffers if her annual salary was consistently lower than the average man’s.

While the fight continues, there are ways to help make your income last longer and stretch your budget. Talk with a financial advisor about your options and what they mean for your individual situation.

Retirement Questions to Ask Yourself

  • Am I taking advantage of company-sponsored retirement plans and matching opportunities?
  • Do I have an emergency fund?
  • How can I stretch my budget to save more?

Mothers: Working at Home

In addition to earning less, women also tend to have fewer working years, largely because of motherhood. Many women lose time at work during maternity leave, and in many families, the mother will choose to stay home to raise their children. Mothers are often the ones who stay home when the kids are sick, too.

Women who take career breaks to care for family members usually have to save between 16 to 25 percent during their working years in order to have saved as much as someone who didn’t take any career breaks.

Some women are lucky to have the option of working from home, which seemingly allows them to “do it all,” staying home with their family without having to take a career break, but even that is not without challenges.

For example, many people are learning this today with Shelter In Place restrictions because of the Coronavirus pandemic, but working from home isn’t always cheap. There’s office furniture, such as a comfortable work chair, a desk and proper lighting. There’s added electricity and gas bills, high-speed Internet and even extra necessities, such as toilet paper and paper towels.

The good news about working from home is that there could be tax breaks. Discuss your situation with a financial advisor who specializes in tax preparation to see if there are ways to help stretch your budget.

Montgomery Taylor Wealth Management is one of these companies. We offer investment management, full-service retirement and financial planning services as well as tax planning services. In fact, the firm’s owner, Montgomery Taylor, recently joined the California Society of CPAs (CalCPA) Personal Financial Planning Committee. For more on his new position, click here.

Retirement Questions to Ask Yourself

  • Is there anything I can write-off by working from home?

If you haven’t had children yet:

  • Do I have enough saved to stay at home when I do?
  • Is there anything I can do now to save for later?

Grandmothers/Sisters/Daughters: Caring for Parents, Family Members or Adult Children

It’s not just children that women miss time in the workforce for. Women spend an average of 12 more years out of the paid workplace than men, and during those years, they’re often caring for grandchildren, elderly relatives or adult children.

Recent studies suggest that the majority of caregivers – 60 percent – are women. Among caregivers for elderly parents, about 60 percent work at least part-time while providing care for their family member.

Those who find themselves in this situation often struggle to maintain their own financial situation while covering their family member’s expenses. To make ends meet, a caregiver often will forego any funding plans for their own retirement and long-term care. This can be problematic.

Weigh the pros and cons of hiring help or neglecting your own financial plans to do it yourself. It can also help to discuss your situation with your financial advisor to see if there are options you may not have considered.

Retirement Questions to Ask Yourself

  • Do my parents have a retirement plan?
  • Who is my parent’s financial advisor and how do I contact him or her?
  • Would hiring outside help be better for me and my family financially and emotionally?

The Bottom Line

Everyone’s situation is different. Retirement and financial planning is not a one-size-fits-all conundrum. There are specific hurdles women face specifically, but they’re not necessarily roadblocks.

With planning and education, you can mitigate the impact that some of these factors might have on you and your financial situation. Be involved and seek help when needed. It can be hugely beneficial to meet with your financial advisor on a regular basis and review your retirement plans at least once a year to make sure your goals still align with your plan and your risk tolerance.

Financial planning can be complex, but remember, you don’t have to go it alone. Contact the financial advisors at Montgomery Taylor Wealth Management to see how we can help.

 

Montgomery Taylor Realistic Financial Planning