What All Women Should Know About Personal Finance

Wednesday, September 30, 2020 | Leave a comment

By Darrell Bryant

It wasn’t until the Equal Credit Opportunity Act of 1974 that women could participate equally in financial transactions. Fathers or husbands needed to cosign for them just to get a credit card. So many things have changed since then, but there is progress still to be made. According to a report, while 85% of women take charge of household expenses, only 23% of women are involved with long-term financial planning. (1) Whether single, married, divorced, or widowed, every woman should be a full participant in her own financial future. 

Establishing Credit

Every woman should have her own established credit. Even if you are part of a couple, you should have your own credit independent of your spouse. In the event of a bankruptcy, divorce, or death of a spouse, you won’t be left struggling to establish credit. 

Retirement

Women are substantially behind men in saving for retirement and are much more likely to live in poverty after age 65. The rate is 26.1% for single women, 18.4% for divorced women , and 16.3% for widows. (2) Women are more likely to save less for their retirement for several reasons: they take time off to have children or care for an elderly parent or work part-time jobs and are not eligible for company retirement savings benefits. Women caregivers under 50 have 30% less retirement savings than non-caregivers. (3) 

Saving for retirement is essential even if you have a spouse with substantial retirement savings; odds and actuarial tables say that you will survive your spouse by six to eight years, so you have to be prepared. (4) Will you have enough money after your spouse dies? And for single women, how do you bridge the savings gap? 

You should have a clear picture of your finances. How much debt do you have? How much money do you have in an emergency fund? In an IRA or 401(k)? Do you and your spouse have enough life or long-term care insurance? These are all questions to ask and plan for. These may be difficult conversations to have, but knowing where you stand is a start. 

In terms of debt, if you are afraid to know how much you owe, then take control and open up those statements and look at those interest rates. Pay down your highest interest rate credit cards first and then move on to the next. Use your new debt-free lifestyle to save for retirement; contribute to your IRA every year. For 2020 the maximum annual contribution is $6,000, and $7,000 if you are over 50. Contribute to your company plan, and if you can, max out the yearly contribution of $26,000 for those over 50. 

It’s Never Too Late 

If you think it’s too late for you, don’t despair—it’s never too late. Set manageable financial goals for yourself. If you’re married, set goals with your spouse. And always have a plan. Here are three things you can do right now: 

  • Establish credit
  • Reduce debt
  • Contribute to retirement accounts

If you need help putting a plan together, we at D. Bryant Retirement Strategies are here to help. Call us at (402) 932-2141 or email contact@dbretirement.com today to set up a complimentary consultation.

About Darrell

Darrell Bryant, CFS®, CAS® is Omaha’s Retirement Strategist. As the founder of D. Bryant Retirement Strategies, he focuses on helping individuals and couples nearing retirement do so successfully. Along with more than 30 years of experience, he received the Certified Fund Specialist (CFS®) designation and a Certified Annuity Specialist (CAS®) designation from the Institute of Business & Finance. Passionate about helping as many people as possible in his community, he hosts Retirement Strategies Radio, heard Saturday mornings at 8:00 a.m. on 1110 KFAB. He has also written articles on financial planning that have been featured on Fortune.com, FoxBusiness.com, Money.com, and in the Midland Business Journal. To learn more, visit his blog, his website, or connect with him on LinkedIn.

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(1) https://www.thewealthadvisor.com/article/ubs-study-women-investors-reveals-divide-and-conquer-approach-managing-finances-multi

(2) https://www.fa-mag.com/news/the-facts-of-life-for-women-retirees-54755.html

(3) https://www.forbes.com/advisor/retirement/retirement-gender-income-gap/#:~:text=Women%20are%20more%20likely%20to,and%20lower%20total%20retirement%20income.

(4) https://www.who.int/gho/women_and_health/mortality/situation_trends_life_expectancy/en/

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