A study by Vanguard found that women in the workplace are 14 percent more likely to take part in a 401k plan offered by their employer than men. Additionally, women were found to have saved 7 to 16 percent more of their salaries than men. Women are naturally used to juggling many priorities including work and family and have natural planning instincts. A study by Fidelity found that 43 percent of women believe they have not made any large financial mistakes compared to only 33 percent of men.
Also, women are predicted to live an average of five years longer than men, meaning they are at higher financial risk during retirement years. If a spouse should pass away, this would decrease income at the same time medical bills could increase. Women often face financial obstacles on their road to retirement and it can be complex to navigate. There are steps women can take in their working years to plan properly, get more involved in family finances early on, and get financial guidance to ensure security in retirement.
While women are eager for more information about family finances and investing, many seem to hold back when it comes to having those discussions. According to Fidelity, 8 out of 10 women admit they have refrained from discussing finances with their family. Whether this is because of lack of time or uncertainty about where they would turn for help, being able to have those conversations is the first step toward a healthier financial future.
Although more women than men take advantage of their employer’s 401k plan, 65 percent of women still do not. Also, three-fourths of women that do contribute have not increased their contribution percentage in over a year. Workplaces may not be providing guidance or motivation to make contributions, but it is important to invest even a small percentage, especially if an employer offers to match a portion of the contributions. If a workplace 401k is not available or if there is a temporary departure from the workforce, opening an IRA might be an alternate solution.
Debt is not a shameful word, but it is a reality. Women could have reduced earnings due to caring for children or aging parents, or for other reasons. This does not obviously mean expenses become reduced though, so debt is easy to fall into, whether it is in the form of student loans or credit cards. It can weigh women down, so reviewing options such as loan deferment, income-based repayment plans, or debt consolidation can provide a path toward financial freedom.
Women can sometimes end up earning less money than their potential allows. Whether this is because of staying in a job too long or not actively going after a more lucrative opportunity, saying “yes” to more is not always that easy or comfortable for women. Continuing to keep an eye out for new opportunities to make more money could help finances significantly, help avoid complacency, and build financial worth.
Having a support team when it comes to investing and managing money can be a huge help. A financial advisor might even be considered a personal trainer that provides the right guidance to achieve desired goals and keeps things on track to get there. Working with a financial professional can provide needed peace of mind and can build a plan that supports security in the future.
Women have unique considerations when it comes to finances. There are great opportunities for financial independence and Bayntree Wealth Advisors can provide helpful guidance. If you have questions, schedule an appointment on our online calendar by selecting the date and time that is most convenient for you! You can also always reach us at info@bayntree.com.
Bayntree Wealth Advisors provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.
