FINANCIAL FOCUS
KRISTI TREVINO Financial Advisor Edward Jones
How Can Women Overcome Obstacles to Financial Security ?
On March 8 , we observe International
Women ’ s Day , a celebration of the social , economic , cultural and political achievements of women . Of course , women still tend to encounter more obstacles than men in the pursuit of financial security . Let ’ s consider a few of them .
To begin with , women are still more likely to leave the workforce , at least temporarily , to raise children , resulting in lower contributions to employer-sponsored retirement plans such as 401 ( k ) s . And women are often the ones who become full-time caregivers of aging parents or other relatives . Caregiving duties can exact a big
financial toll : The lost wages , pensions ( including 401 ( k ) s and similar plans ) and Social Security benefits that a woman loses to become a full-time caregiver amount to more than $ 300,000 over her lifetime , according to the National Academy of Sciences .
Women also may be more susceptible to financial downturns . Consider the COVID-19 pandemic : Just a few months ago , in December , women lost 156,000 jobs , while men gained 16,000 , according to the Bureau of Labor Statistics , which also reported that women accounted for 54 % of the jobs lost from the pandemic in 2020 .
And women are not unaware of their circumstances and outlook . Just 41 % of women are confident about retirement , compared with 56 % of men , according to a survey by Edward Jones and Age Wave .
But if you ’ re a woman , you can take steps to help improve your financial outlook . Here are a few suggestions :
Take full advantage of retirement plans . If you are still working and your employer offers a 401 ( k ) or similar retirement plan , take full advantage of it . Put in as much as you can afford each year and increase your contributions when your salary goes up . Also , within your plan , you ’ ll want to choose the mix of investments that can help provide the most growth potential , given your individual risk tolerance . Also , even if you contribute to a 401 ( k ) or similar plan , you may also be eligible to fund an IRA , which gives you even more investment choices . Evaluate your Social Security options . You can typically start taking Social Security benefits when you ’ re 62 , but your monthly checks will be much larger if you wait until your “ full ” retirement age , which will likely be between 66 and 67 . You might also consider whether you ’ d be better off by taking spousal benefits , if you ’ re married and your spouse earned more money than you . You ’ re generally even eligible for spousal benefits if you are divorced , as long as you were married at least 10 years and you haven ’ t remarried .
Look for unexpected income opportunities . Even after you ’ ve formally retired , you may still find ways to receive some earned income . Perhaps you can work part time or do some consulting . And if you ’ re a caregiver , you might be able to receive some compensation for your work . Many local governments pay non-spouse caregivers who act as personal attendants , although the rules vary greatly by state and county .
These certainly aren ’ t the only ways you can improve your financial status , but they may prove useful to you . In any case , be aware of the challenges facing you and do whatever you can to brighten your future .
16 MOMENTUM