Smart Consumer Series – What Women Need to Know About Money

Six strategies to weave a financial safety net that lasts a lifetime

 

Whatever your stage of life, you can chart a course to financial security. In the interest of equity, we’ll point out that the advice that follows can apply to men, too.

  1. Stay in the Game – For some women, child care or caregiving can lead to career atrophy. Rather than let that happen, consider working part-time.
  2. Be involved in the finances – A 2015 Fidelity survey on couples and their finances showed that more than 40% of couples didn’t even know how much each spouse earned, and 36% disagreed on their joint investable assets. Cluing each other in and deciding on goals together can make both spouses financially more secure.
  3. Save, Save, Save – Whether you plan to retire at 50 or 70, there’s a good chance you’ll live into your nineties, so you need to save accordingly, by contributing the maximum to your 401(k) or other workplace plan.
  4. Cover Your Bases – You and your spouse should have a Will. You both also need end-of-life documents; a durable power of attorney allows a family member or designated agent to make financial decisions and transactions, such as paying the bills, on your behalf if you become incapacitated.
  5. Set Retirement Goals – Couples nearing retirement will have to make key decisions about where and how to live, as well as how to ensure that any pension or annuity payments go to the survivor—usually the wife—and how to maximize Social Security for both when one spouse—usually the husband—is the high earner.
  6. Anticipate Health Costs – Health care costs can jeopardize your retirement security. Fidelity Investments estimates that a 65-year-old couple who retired in 2015 will spend $245,000 on health care throughout retirement. That’s up 29% since 2005, reflecting rising medical costs and longer life expectancies.

 

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