Evan R. Guido
Despite their differences, women and men have at least one thing in common. They need to establish and follow a plan if they hope to enjoy a life free from financial worries.
It seems that women are getting the message and are becoming increasingly sophisticated about how they go about saving for life's major financial events: home and auto purchases, vacations, children's education and retirement. This is important because women's planning needs are often different than their male counterparts. Some of the reasons, according to the Women's Institute for a Secure Retirement (WISER) and the U.S. Census Bureau, include:
- Women live longer than men, on average as many as five to seven years longer.
- Women typically earn less than men (77 cents to the dollar).
- Due to the gap in wages, women save less for life's major expenses and retirement than men.
- Women move in and out of the workforce through the years, often to care for children or aging parents, which makes it difficult to accumulate much of a retirement nest egg.
These circumstances dictate that women become personally involved in their financial well-being and take an active role in developing a strategy to assure financial security. Developing a comprehensive personal financial plan is the first step to achieving this goal. This is a five-step process that involves working with a financial advisor on:
Too often, women lack confidence when it involves the stock market so they avoid it, often making the mistake of investing too conservatively. The more a woman learns and understands about the market the more comfortable she will be using it to reach her objectives.
Because of divorce and extended life expectancies, most women will be responsible for their own finances at some point in their lives. According to David Bach, author of "Smart Women Finish Rich," 25% of all widows go through their husband's death benefit within the first two months. And, consider that the average age of widowhood is 56.
These statistics demonstrate the need for women to become personally involved in achieving their own financial security. Establishing and following a financial plan tailored to specific wants and needs is the surest route to obtaining this goal.
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