Addressing the gap in financial literacy among women
Tapping into knowledge and guidance can help enable financial empowerment.
TAKING STEPS TOWARD OWNING YOUR FINANCIAL FUTURE
There are some foundational steps women can take to help gain financial empowerment and potentially create a more secure financial future:
- Ramp up your savings. Be sure to fund your cash reserves account to the appropriate level so you have the financial flexibility you need to cover unforeseen expenses. Your reserves should be somewhere between three and 24 months’ worth of spending, depending on how stable your income is.
- Maximize your workplace retirement plan and/or IRA savings. Participate in your retirement plan at work to the maximum extent you are permitted on a pretax basis. Depending on your Adjusted Gross Income, you and/or your spouse may still be eligible to contribute to a deductible IRA even after contributing the maximum to your company retirement plan.
- Consider life insurance and long-term care insurance. With a longer life expectancy, women are more likely both to survive their spouse and to need long-term care – a major expense not covered by Medicare or health insurance. Buying life and long-term care insurance can help protect the financial strength you’ve built over the years.
- Delay taking Social Security if you can. Unless your health or other circumstances prevent you from doing so, work full time to at least your full retirement age and take Social Security no earlier than full retirement age. Waiting longer can be even more beneficial.
- Invest in a diversified portfolio. Consider remaining fully invested in the major asset classes and market sectors, using tax efficient investments and rebalancing your portfolio regularly.
- Stay involved. If you’re married, schedule meetings with your spouse three to four times a year to review the status of your bank, investment and retirement accounts; outstanding debts (mortgage, auto, student loans and credit cards); and monthly expenses. Attend all meetings with your financial planner, tax preparer, estate attorney and insurance agents so you’re both knowledgeable and confident about your total financial plan. If you’re single, schedule similar check-ins with your financial planner.
A comprehensive financial plan – and leaning on expert advice – can build personal financial literacy and confidence over time.
“Money is not the number in a bank account, but what you want to do with it – the life goals you want to hit,” says O’Brien, who noted how she values the opportunity to work with Edelman Financial Engines wealth planners to ask questions and help people really think about strategies and planning.
Our firm was founded 35 years ago with the mission of providing fiduciary financial planning advice and increasing financial education for our clients. We continue that mission today, as we prioritize financial education through our webinars, exclusive client newsletters and articles to give clients the knowledge, confidence and advice they need to help achieve their financial goals. If you have questions about the steps above or you’d like to learn more about how a sound financial plan can help you achieve your goals, contact us to connect with one of our financial advisors.