Women and Wealth: Four Things You Need to Know to Secure Your Financial Future

Choosing the right executor for your will

Women today are earning and controlling more of our nation’s wealth – and becoming more affluent. Even so, they generally face more uncertainty in their financial futures than men.

The following article, contributed by Tim Agnew, Managing Director and Lisa Curles, Senior Client Service Specialist, discusses four things women need to know when planning for their financial future.

Women are more likely to be widowed than men and more likely to defer earning income in favor of caring for family members. They tend to save first for children’s education and second for their own future retirement needs.

Caring for loved ones and providing for children’s education are of course critical goals that support the greater good of family well-being – but at the same time, failing to plan adequately for your own retirement and other financial realities can lead to upheaval that’s completely avoidable.  With some care and forethought, competing demands on your wealth can be managed and you can be ready for the unexpected. Smith and Howard Wealth Management (SHWM) is here to help.

1) Statistically, women live longer than men, and that means your assets need to last longer.

If you’re married, chances are you will live longer than your husband. Our philosophy is that you should be involved now in the development of your financial plan and be up to date on your investments and how they are structured. Getting up to speed in the event of death (or divorce) is the last thing you need to worry about.

Even more, we know that both spouses benefit from getting to know and trust the family’s wealth advisor, so we invite and welcome both of you to all discussions with us. We’ve found that each party usually has a different concern, question or perspective, and it’s very helpful for you – and for us – to discuss your entire financial picture together.

In the event you find yourself solely in charge of your financial future, this trusted relationship and a foundational understanding of your wealth can provide confidence and security during a very challenging time. SHWM helps clients get through these kinds of life events and then works with you to understand your current situation and goals, and advise you on your options for the future.

2) It’s important to know your numbers for both your kids’ education and your retirement.

In the competition between a woman’s retirement fund and her kids’ education fund, retirement usually gets short shrift. But while there are scholarships, grants, university job programs and loans available to students, there is no program for retirement. Parents want to do anything they can for their children, but by ignoring your retirement needs, you risk having to live on less in retirement.

An integral part of the Smith & Howard Wealth Management financial planning process includes helping you determine goals for both your children’s education and your retirement. We work with you to help develop a viable long-term plan that can include funding for these goals, and other issues that may be important, such as catastrophic medical or other significant unforeseen expenses – or passing on assets to your heirs.

How much do you need to put aside each month to meet all these goals? SHWM can help you determine these and other goals and can help you put a plan in place to get there. Often, there are ways to solve the problem by adjusting spending and/or reallocating various assets.

3) You may have more life insurance than you need.

SHWM’s review of life insurance begins by determining what level of coverage is necessary for your situation.

If you’re a single woman and have children, proceeds from your policy may need to support them until they get through college. If you’re part of a couple and the primary bread winner, your partner will need enough liquid assets to replace your income stream. 

Most people only think of minors as dependents, but if you’re supporting your parents, they’re dependents as well. And if you’re a stay-at-home mom, you may not be earning income, but when you think about what it would cost your spouse to hire someone to care for the children or to quit work and stay home with them, it can get expensive fast.

Life insurance can also be a way to lessen the impact of estate taxes at death.

And once it’s in place, life insurance coverage should be periodically reviewed to see that you have the coverage you really need. Changes in financial circumstances or other events may mean you now require more coverage – or less.

Click here to read three tips for reviewing your life insurance coverage. 

4) Life events can have a big impact on your finances

Life throws plenty of curve balls our way and it’s very common for people to lose track of how events are affecting their long-term financial goals.

You can lessen the impact by being ready. It’s wise to regularly revisit your plan and ask some questions: Are you on track? Not on track? What’s it going to take to get on track?  If you’ve never had a professional help you assess the whole picture, that’s another step worth taking. We can walk you through decisions like what to do with your kids’ college savings, what to do with your insurance, how much to add to your savings every year. Also, we can help you see how much you’re really spending, how well your investments are performing, and where you may need to make changes.

And if you have a plan, schedule time to revisit it regularly. Life happens, things change and the plan needs to change too. We’re here to help you go through that process.

It may be helpful to know your issues aren’t unique and that reassurance can be found in the financial planning process. SHWM’s professionals can help you be prepared for the future – and for events that don’t go according to plan. By evaluating different scenarios and assumptions with you, we can help you see where you may be vulnerable and walk through options for protecting yourself. Our goal is that you have confidence in your plan – so you can focus on those areas of life where your energies are best spent.

Women and Financial Planning

About 40 percent of SHWM’s clients are women and our Women of Meaning event series is geared toward them. We host occasional casual events that cover a range of topics – from investments to art. These provide a chance for small groups of women to spend time together in relaxed social settings. 

We understand women face some of the same, but also different challenges than men and may seek a different approach. Please call us at 404-874-6244 with any questions you have about your financial future or to set up a meeting so we can get to know each other better.