4 Ways Financial Planning is Unique for Women
Financial planning is complex and men and women tend to differ on what they need from a plan and the financial professional with whom they are working. Read on to find out what makes women unique.
1. We Live Longer
This is both good news and bad news. Of course, the good news is that we will be around for many years to enjoy our lives, assuming we are happy, healthy, and able. The bad news is, our longer life span means we require a larger nest egg to live on in our retirement years. Therefore, it becomes even more important for women to save early and often. In addition, health insurance, including long-term care, become even more critical. Medicare Part A is free if you worked long enough in a job where you paid Social Security taxes or have a spouse that qualifies. However, Part A only covers hospitalization. Most people will require supplemental plans for regular doctor visits and prescriptions. Long Term Care insurance is available through private insurance companies and helps to cover nursing home and personal care, which are not covered by traditional health insurance. Of course, all of these come at a high cost (and they keep rising).
2. We Take Time Off
Historically, women have left their full time careers to raise children or care for elderly parents. My mother quit her job when I was only 2 years old. She even made more money than my father at the time. Women do this for various reasons, but as a child, it was great coming home from school and having my mom there. As women, we are natural caregivers. Men have also begun to assume this role in recent years. However, there is an opportunity cost when we choose to leave the workforce. We lose the opportunity to participate in an employer-sponsored retirement plan, resulting in years of lost investment contributions and returns. We could also lose valuable job training and skills, requiring us to seek continuing education before returning to work. As technology evolves at a rapid pace, it is easy to fall behind.
3. We Earn Less (Sadly)
Yes, it is 2019 and we are still talking about women earning 75% of what men earn doing the exact same job. It is pathetic, but it is a reality. If we earn less, it may mean we are also saving less. Ladies, the next time you are in a job interview, know your worth and do not back down. We are worth more than we ask. Negotiate and get what you want and deserve.
4. We Engage Differently
Women are looking for someone who understands them. Someone who they can trust and can share their deepest concerns. Men, as a whole, gravitate towards graphs, numbers, and the bottom line. Women tend to use emotion in decision making and that is no different when choosing a financial planner or any other professional. If we do not feel like we are being heard, we will not engage. If we can find common ground, we are more likely to open up and provide the information needed to develop an appropriate plan.
So, what does all of this mean? If you can relate to any of these categories, you require a financial planner who understands you and what is required to help you live, work, and retire successfully. Talking about financial topics can be a sensitive subject. It is important to find someone who has your best interests at heart and truly cares about you and your situation. A CERTIFIED FINANCIAL PLANNER™ practitioner has a fiduciary duty to do what is in your best interest. Adding to that, a Fee Only financial planner does not sell products or work on commission. Do your due diligence and expect (no, require!) an extraordinary experience.