Why It's Important for Women Over 50 to Focus on their Finances
It’s important that women play an active role in saving and managing their money throughout their lives. However, it is particularly important for women to focus on their finances as they close in on retirement. There are several reasons for this:
- Women don’t usually earn as much money as men so they have to work harder to make sure they have enough money in retirement.
- Women often leave the workforce for some period of time in their lives, whether to care for children or aging parents. Taking time off is impactful to a woman’s bottom line. The years a woman is out of the workforce are years that she isn’t contributing to Social Security earnings or an employer sponsored retirement account.
- Women typically outlive men by 5+ years. It’s therefore even more important for women to make sure they have enough money saved for the years after they’ve retired.
- Most women in the US are single from the age of 65 to the end of life. The result is that they are not sharing in living expenses with a partner and don’t have another retirement nest egg to draw on. Plus, multiple studies reveal that when women become single following a partner’s death or through divorce, the woman’s lifestyle typically goes down.
What Women Can Do to Take Control Of their Finances
This may sound daunting, but you can take control of your finances NOW to positively impact your financial future. Some of the most impactful steps women over 50 can take with regard to their finances are:
- Work. It’s easier said than done, but if you have a job, continue to work for as long as you can. If you can work until you are 70 or beyond, you will have the benefit of more years of income, more years of contributing to investment and savings accounts and a greater monthly payout from Social Security. There are many great career resources available for women over 50 to help maximize the opportunities of getting and keeping a good job.
- Focus on your future. Meet with a financial advisor who can give you an accurate assessment of how much money you can expect to have in retirement. Similarly, if you have a particular lifestyle in mind for retirement or a place you want to retire, a financial advisor can give you an idea of how much money you’ll need to make your dream a reality.
You can find a financial advisor through the female focused Ellevest or databases like: the National Association of Personal Financial Advisors, the Financial Planning Association and the Certified Financial Planner Board of Standards)
You can also start crunching the retirement numbers yourself with some of the many retirement calculators that exist. Among the most popular retirement calculators are those from: Nerdwallet , Voya and Dave Ramsey’s easy to use calculator .
- Investigate long-term care insurance. There is no one right time to purchase long-term care insurance, but for many people, the time to begin considering it is in their 50s. There are a number of different variables that inform if and when you should consider buying long-term care insurance. Read about it and decide what’s best for you.
- Complete your estate plan. This means make a will, appoint representatives to be your powers of attorney for healthcare and finances and complete a living will. It is critical to make sure you have these most important legal documents done and stored in a safe place.
Don’t forget about creating a plan for your digital assets also.
While it’s never too late to focus on getting your financial house in order, women over 50 should consider their finances now. Most people will still have 10-20 years of work ahead of them before they retire. This is a good time to earn and save as much as you can, determine your retirement goals and position yourself for the future.
The future will be the present at some point and you’ll be in a much better position financially and otherwise if you are proactive rather than reactive. Taking an honest look at your finances and getting your your financial house in order is a big part of planning for tomorrow, while living for today. Now go do both!
