Ladies, 10 Tips to plan for your financial future
Posted by Stephen McCarthy on Mon, Dec 19, 2011 @ 09:53 AM
Women lag behind men in the financial retirement stakes. What can be done about it? Here are 10 tips in the first of our two-part series.
Almost 50 years after the modern women’s liberation movement began in the early 1960’s, and more than 20 years since the “third wave” of the feminist movement started in earnest, females still lag their male counterparts in two vital areas of their lives: employment earnings and superannuation.
Why is it that after decades of equal opportunity and feminism we find the following statistics regarding females and their finances?
- Women earn on average 17% less than their male counterparts.
- The superannuation balance of women is about half that of men – $128,598 vs $233,961. *
How long do you think you could last on $128,598? Invested at 5.6%, the interest for the year would be $7,201.49, which works out to $138.49 per week.
When you consider that women typically outlive men, this is all the more reason why you need to have a financial plan that will not only bring you to parity, but also last longer to cover those extra years of retirement.
So what can be done to improve women’s retirement prospects?
Here are some tips to help you get started on your journey towards financial security.
- Become financially savvy. This is a subject and skill that can be mastered like any other. The price for failing to come to grips with your finances and by not making the right investment moves in your younger years, is a very painful one.
- Employment – seek out firms that are genuinely equal opportunity employers and familiarise yourself with their employment and remuneration policies.
- Accept that you will spend time out of the workforce for family reasons. Take steps to increase your savings, superannuation and other forms of investment while you are earning to help you to get ahead of the game and offset the time spent out of the workforce.
- Set time aside to develop a financial plan with your partner, and make this a joint commitment and a joint project where you both agree and contribute.
- Ensure that you review and update this plan every year, and that you set clear financial goals for the year ahead.
- Be prepared to take the lead if your partner puts this off or seems reluctant to set things in motion. 90% of people procrastinate in this area of their lives. They think there’s plenty of time to make these important decisions and intend to do something about it later … until it is too late.
- Accept that superannuation is a welcome nest egg, but understand that for many people, it may not be enough to guarantee a comfortable retirement income. You need you to have a second source of income to support you when your work income stops.
- Develop an income goal for your retirement, and then calculate what lump sum you will need to have in place to achieve this.
- Develop an investment plan that will take you to your investment goal. Remember that unless you have a plan to get there, your goal is better termed a “wish”, as it won’t happen by itself.
- Make sure that both you and your spouse are well insured against the kinds of misfortunes that can and do happen, which many people tend to ignore, thinking, “It’ll never happen to me”.
McCarthy Group has helped many Australian families analyse their financial situations and develop sound financial plans for their future.
More and more women are choosing to take this vital step to achieve financial security and independence. You can too. Download our free guide on the Key Rules of Property Investing, or contact us today to arrange and obligation free consultation, and take the first steps to securing your financial future.
Call us on 1300 850 318 for a no-cost obligation-free consultation. It could be the most important call you’ll ever make.