Education and Participation Trigger Women’s Retirement Success

Though women’s retirement portfolios are often found to be more consistent with their tolerance for risk than their husband’s, their knowledge of the larger retirement and financial picture generally lags behind their spouse’s. The culprits of this conundrum are typically the role changes of the past 40 years (including more women working outside the home) and men’s traditional role as the family CFO.

Tell-tale signs abound for the need by women to become further informed and take a more active financial management role:

• Increasingly long lives of 88 and 86 years for women and men, respectively
• Husbands preceding wives in passing 87% of the time
• The emotional and financial upheaval following a divorce or unexpected death of a spouse

In fact, findings from a 2014 New York Life study indicate that 30% of widowed women “wished they’d had more detailed discussions about what might happen financially and otherwise if one us had passed,” and nearly 20% felt a need for better organization or accessibility to important papers.

Mastering the basics is key to awareness and long-term management, and include:

• Budgeted cash-flow: the difference between monthly income and expenses.
• Tax liabilities; and the ability to eliminate, reduce or defer them. Tools are available to model these impacts and potentially increase spendable income.
• The availability of survivors’ Social Security benefits, even if divorced.
• How fixed income annuities can protect assets from value fluctuations in volatile markets and be a source of guaranteed lifetime income.
• Measuring and quantifying risk tolerance, and how to shift assets accordingly.

 Getting a financial grip need not be tackled alone. A financial planner or retirement specialist can be highly beneficial in overcoming the learning curve to create a financial roadmap.