Financial planning is important for any individual or couple. For women, it matters even more.
Did you know that women’s life expectancy at birth is almost five years longer than men,* meaning there are about five extra years of life where women are paying bills and keeping up with living expenses without a salary coming in? This is one indicator of why financial planning is critical if you’re a woman or care about a woman’s financial future. The team at Chelsea Groton Financial Services understands the challenges women face and is here to help.
Historically, women have been caregivers. They may have taken time off from work at one point when their children were young. They may allow grown children to move back home after college or offer to care for an elderly parent. Understandably, these decisions may feel right, but they are costly. They may prevent a woman from saving as much as she could, or could force her to dip into savings that had been put aside for retirement.
Since unknowns about the future are endless and full-time working women on average, make $169 less than men do per week** – over $8,500 less per year – it’s important for women to begin to take steps now to maximize every dollar available. This way, they’ll be better prepared to handle various circumstances.
Making a Plan
The first step to ensuring you can have an income stream in retirement, or you’re able to make up for any gaps in income or savings, is to talk with a financial advisor. The advisors at Chelsea Groton Financial Services ask new clients to answer questions and provide documents such as mortgage statements, current investments, tuition costs, and weekly spending, which help tell the story of their current financial situations. Meeting with a financial advisor to discuss spending, savings, and anticipated retirement income will allow you to see the whole picture. Couples should attend these meetings together so both people have an understanding of the financial decisions being made, and are able to maintain their lifestyle as a couple or as single people.
“Due to unknowns, sometimes people feel uncomfortable planning for the future,” said John Uyeki, SVP, Director of Financial Services, Chelsea Groton Bank; Financial Advisor, Infinex Investments, Inc. “The reality is, even if you are in a marriage or partnership now, you will probably live on your own at some point later in life. It’s important to realize that, and to work together along with financial advisors who can suggest ways to fill the income gaps and help ensure that financially, the person who outlives his or her spouse will be ok.”
Some people feel confident about how prepared they are for retirement because they have pensions or annuities. If you’re married, the challenge is that the higher payout option some people select will only benefit one of the spouses. This means that if one person passes away, the other person will no longer receive income. By reviewing all options, you can make the best choice to provide continued income to the widow or widower when one spouse passes away. This is one of many topics the team at Chelsea Groton Financial Services will help review with you. Depending on how your plans are currently set up, the advisors will make recommendations on next steps and other sources of possible income. It’s always important to meet with an advisor before making financial decisions.
Another misconception some people have is that their home with the paid-off mortgage will serve as their primary residence for the remainder of their lives. Since many women outlive their spouse or simply can’t take care of a home anymore, they make up about 67% of the population occupying nursing homes.† People need to plan for the added expense of different types of care, such as nursing homes or in-home healthcare, as they age. Ensuring there is an income stream in retirement can help supplement these costs.
Revisiting the Plan
Once your financial plan is in place, it’s important to schedule a follow up at least once a year with your financial advisor since circumstances change. Divorces, marriages, taking care of grandchildren or elderly parents, or a spouse falling ill can all affect income and savings in preparation for retirement. Asking questions, including “where” documents can be found, “why” an approach or investments have been selected, and “how” things could change if a spouse passes away, will all help to alleviate possible challenges in the future. The team at Chelsea Groton Financial Services will ensure you are comfortable with the plan moving forward, and will help to develop a portfolio that can meet your goals and risk tolerance as you grow older and more dependent on that income.
If you’re interested in learning more about the ways the team at Chelsea Groton Financial Services can help you develop a custom financial plan to suit your needs, or you’d like to attend an upcoming women’s financial empowerment event to discuss the obstacles women face in retirement planning, please visit chelseagroton.com or call 860-572-4040.
About Chelsea Groton Financial Services: Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA / SIPC. Chelsea Groton Financial Services is a trade name of Chelsea Groton Bank. Infinex and the Bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.
*National Center for Health Statistics Data Brief, No. 267, December 2016
**Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, extracted February 2016
†National Center for Health Statistics, National Study of Long-Term Care Providers, May 2016