Women today are thriving in the workforce. They are entrepreneurs, CEO’s, and leaders in their respective fields. In fact, women represent 47% of the workforce and according to a recent survey by American Express, as of January 2017, there are nearly 11.6 million women-owned business in the U.S.
However, despite continuously growing as business leaders and taking strides to grow their personal wealth, women face a number of challenges that could impair their financial security over the long-term.
As women continue to tackle the business world, it is imperative to understand the challenges they face and the solutions to improve their personal financial future. These challenges include:
Although women make up nearly half of today’s the workforce, there are still inconsistencies in pay between men and women. According to the AAUW, full-time working women in the U.S. received only 80% of the wage paid to men as of 2015. These inequalities can present obstacles when planning for retirement and overall financial security.
The majority of women do not currently have a retirement plan set in place. A USA Today article reports that women, on average, are expected to live 20.5 years longer than men. With a longer life expectancy, it is imperative that women take initiative to participate in a retirement plan.
As a result of women earning less than men, there is a lower level of Social Security benefits available when it is time to retire. One way women can combat this obstacle, is working with their financial planner to strategically assess the best time to take their social security benefits.
Difficulties can also arise in establishing a pension or employer sponsored 401(k). In addition to balancing a professional life, many women also act as the primary caregiver for their family. In turn, women tend to spend fewer years in the workforce in order to tend to their children and/or elderly parents. As a result, women can be less likely to qualify for company-sponsored retirement plans; often struggling to receive all of the benefits from those plans.
Although women comprise almost half of today’ workforce, only 30% of IRA’s are owned by women according to an Employee Benefit Research Institute study. In addition, the average balance of a woman’s IRA is significantly less than that of men. This can present future challenges for women looking to enter retirement, or currently enjoying their retirement years.
Despite the challenges women face when addressing financial planning and building a financially secure future, there are several tactics women can implement to improve their chances of success:
Creating a manageable and consistent financial routine can greatly improve one’s overall financial security. At the end of each season, get into the habit of revisiting your finances: review your budget, make any necessary changes to your information, and evaluate your investments.
It is also recommended to keep a tangible file of your important documents that is maintained on a regular basis. One way to stay organized is by keeping copies of your insurance documents, tax statements, and similar pieces of information stored in a file folder or binder. Though electronic versions can be convenient, this also runs the risk of security breaches or potential data loses. Keep your important information in a secure location in your home to stay organized and protected.
It is recommended to set a reasonable and healthy budget for your lifestyle. Look at where you are spending your money and prioritize those expenses according to your long-term financial goals. Plan ahead. Setting money aside in an emergency fund can save you stress and financial hardship in the long run. If an emergency were to arise, an emergency fund allows you to cover necessary expenses, without major changes to your financial well-being.
Understanding all of the resources available to you and planning a budget can seem like a daunting task. However, meeting with a trusted and experienced financial advisor can alleviate the stress of navigating the financial world alone. They can assist in making strategic and appropriate decisions in order to help you stay on track and plan for the long-term.
You can consult with a financial advisor at Duncan Financial Group or learn more about the resources we offer by visiting https://duncangrp.com/