Financial Adviser: For Women, Some Unique Financial-Planning Challenges

Women tend to live longer than men and yet receive only 80% of the retirement income that retiring men receive, according to the National Institute on Retirement Security. Add to that the possibility that women may leave the workforce to raise children or take care of aging parents, and it’s clear that women may face financial challenges.

According to a recent OnePoll survey sponsored by BOK Financial, only 11.45 percent of female respondents—fewer than one in eight— reported resonating with the comment, “I feel pretty confident that I know all I need to successfully manage my money.”

Although it can seem overwhelming, women can achieve financial empowerment by taking simple steps—starting with making a plan.

To take charge of your finances, focus on the following five areas:

1. Get a handle on your financial situation.

Examine your income, expenses and savings to determine where your money is going. Build a statement of net worth and track yearly. Are you building wealth or simply treading water?

2. Set financial goals and save accordingly.

Start with a plan to pay off debt and establish an emergency fund that will cover six months of expenses. Plan for large expenses such as education, home improvements and car purchases. Make retirement savings a priority. When you are ready, turn to a trusted advisor for help in determining the amount to save toward your goals.

3. Make an estate plan.

At a minimum, you should have a will. This is especially important if you have children because you need to name a guardian.

Review the beneficiaries on your insurance policies and retirement accounts to ensure they are correct, as these designations trump the will. Use joint titling with rights of survivorship carefully. While sometimes used for convenience, it is important to know that if you die, the assets will automatically pass to the joint owner rather than to the beneficiaries named in your will. As you get closer to retirement, other considerations should be addressed.

4. Plan for healthcare costs, now and future.

If using a high-deductible health plan, fully fund your Health Savings Account and consider holding it for health care expenses in retirement.

Make a plan for health insurance if retiring before age 65, when Medicare eligibility begins. Study your options and understand how Medicare works with your employer-provided plan, if still working at 65. Consider how you will cover the cost of long-term care, if needed.

5. Review your Social Security claiming options.

Consider strategies to maximize income for your surviving spouse. Understand the impact of taking benefits before reaching full retirement age.

Getting a handle on these items is the first step in getting more engaged with your financial future, but it’s important to remember that this journey is ongoing. Revisit your financial plan when making big decisions or when your situation has changed materially—such as when starting a family, embarking on a new job or even dealing with a divorce. Even if nothing major has changed, your plan may still need a refresh. 

Once you’ve started, make sure that you’re staying on track by:

Involving the entire family. Meeting regularly to discuss progress is a great way to ensure everyone is on board and that kids are gaining important money management skills.

Staying disciplined. Quick, frequent check-ins are less daunting than a lengthy review once a year.

Engaging with a financial professional. Consider working with a trusted partner who understands your current situation and can connect you with a broad array of tools to help you reach your goals.