Women and wealth – why it’s time to get active


Women and wealth – why it’s time to get active

Women and wealth – why it’s time to get active

Gone are the days when men made most of the financial decisions in a household. When I was growing up, my mum looked after the family and my dad looked after the finances, and this was certainly not uncommon.

But things have changed and women should rightfully expect that the wealth management industry is keeping pace. Statistically women live longer, save less in retirement and are more likely to be financially impacted by taking career breaks to care for family. Women today who do not take an active role in financial decisions may be in danger of losing out.

Millennial women are poised to be the most financially independent generation in history. Regardless of how much money they have or don’t have, whether married, in a relationship or single, women would be advised to have an awareness of their own financial wellbeing. A good financial planner will help.

Research has shown that women can often be more cautious investors, placing greater importance on the long-term goal, whether this is a comfortable retirement or being able to afford to buy a longed-for holiday home in the South of France, and have less interest in a quick return.

Indeed, a recent US Article discussed the fact that many younger women shy away from investing outside of their pension fund, with 60% citing the reason as a lack of knowledge of investing and 34 % lack of confidence.

Statistically women are also highly likely to live long lives. Today, a 40 year old woman’s life expectancy is estimated to be 88 years, two years more than a male of the same age. So how does that 40 year old woman invest wisely to secure a good lifestyle in retirement?

It is said that as females we to like to see life in pictures, so please indulge me whilst I share a little of my own personal journey. As a 40 something female who divorced a few years ago, my biggest financial concern was whether my retirement was still on track or whether I may now be forced to work well into my 70’s.

If you were to ask what I hoped my retirement would look like, I would furnish you with thoughts of phasing into retirement around age 60, still enjoying work but with more time to catch up with friends for coffees and go to the gym. Ultimately I would hope to be hanging up my work wardrobe for good around age 65. Then I would tell you all about my travel plans – well, I didn’t have a gap year, so I need to make up lost ground! A client once described this phase to me as the golden years, when you are fit and healthy and able to fully enjoy life.

Then I envisage I may start to slow down somewhere around age 80, and at this stage my annual expenditure may be less. You see I really have given this some thought! But the question is, do I think this way because of my job, and do most 40 somethings have such a clear picture of how they hope their life in retirement will look?

As the old saying goes fail to plan, plan to fail. But, if we don’t have a picture of where we want to get to in life, what are the chances of success?

So, back to the vision of my retirement.  By using cashflow technology – and I can’t recommend this highly enough – I was able to map my financial life into a picture. I was able to see very clearly that, based on set assumptions around my continued pension contributions and estimated investment growth, my retirement plans are on track.

How often do we receive our annual pension statement, have a quick look and then file it away without really understanding the implications of this valuation? And with state pension age pushing further and further into the future, is this really something we can rely upon to fund our lifestyle in retirement?

So, my question to all women is, what do you hope your life in retirement looks like? Have you given these pictures any real thought, or is retirement still merely a thought which gets filed away each year?

My advice is to firstly understand life goals, and then to figure out if they are realistic financially.  If not, a financial adviser, whom you can trust to guide you to make the financial decisions required, can help bring turn your vision into reality.

For me, retirement is still some time away, but at age 60 I will hopefully be the well-dressed woman sipping on a coffee in your local coffee shop whilst planning her next travel adventure thanks to actively taking control of my finances when it counted.

 

 

 

 

 

 

 

 

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