Financial planning for women: learn why it’s important for women to take more of an active role with saving and investing for the future.
Women take on many roles over the course of a lifetime, often putting other’s needs before their own as daughters, sisters, mothers, wives, and friends. However, when it comes to finances, women are often not the primary planner in the household. Here’s why it’s important for women to take more of an active role with saving and investing for the future.
Over the last 120 years, females have made strides in their rights as American citizens. In the 1900s women gained the right to own property, vote, have equal pay, fly into outer space and serve on the Supreme Court, among many others.
In the 21st century, women have continued to make strides toward equality, gaining more and higher-level, better-paid positions, and respect in both the workplace and the community. However, women also continue to care for their families, friends, and neighbors. They plan countless events, vacations, and Sunday dinners, but according to the U.S. Census Bureau, only about 50 percent of women ages 55-66 have a plan for retirement.
Central Investment Advisor Amie Suttenfield, LPL, provided us with valuable insights and tips for women of all ages regarding planning for retirement and their financial future.
Q: Why do you feel it’s important for females to have an active role in their finances?
[Suttenfield]: As a financial advisor, I have assisted many women in a situation where they were uninvolved with financial issues when their husband unexpectedly passed away. At this point, women are not only dealing with the grief of their loss, but also the stress of taking on the financial situation and decisions which go along with it. Some women have little or no understanding of their assets and/or debts and it becomes a very difficult situation, and one that can be avoided with some planning and education. It is important for women to be involved in their finances no matter their marital status or stage of life.
Women (and men – or couples) should find a financial professional with whom they are comfortable. You should never feel awkward or embarrassed asking questions about your money. A quality financial advisor will be happy to answer any questions to help you understand your financial situation.
Q: What is the best way for women to get started investing?
[Suttenfield]: The first step is understanding the earlier you start investing, and planning for retirement, the bigger the impact. However, it’s never too late to start. Do your research before choosing a financial advisor. Most advisors offer the same products and services, so it is important to understand their experience, investment philosophy, fee structure, and investment minimums. Here at Central Investment Advisors, we do not have a set account minimum; which is beneficial for those who are just starting out or those who want to begin slowly by dipping their toe into the investing world.
While it can be difficult, I believe it is important to separate your emotions from your investment decisions as you navigate your personal financial journey. Finding a trusted financial advisor, who has your best interest at heart and keeps the focus on your goals, can save you from making irrational decisions that may de-rail your long-term financial plan.
Q: When building a financial plan for women, what do you take into consideration and is it different for men?
[Suttenfield]: With statistics showing that women are likely to live longer than men, it’s no surprise that women are more likely to need long-term care. According to the American Association for Long Term Care insurance, more than 70 percent of nursing home residents are women. A private room in a nursing home can easily cost $100,000 a year, so planning for those extra years of possible long term care expenses can significantly impact a woman’s financial plan.
I don’t believe our investment strategy differs between our male and female clients. We customize the investment plan for each client and their unique situation, specific investment goals, and comfort level with risk.
Q: What should women know about investing and taxes?
[Suttenfield]: It’s important to understand the difference in taxation of short-term and long-term capital gains. Gains on investments sold in the first year of owning, are taxed at ordinary income tax rates. However, waiting at least 12 months to realize gains could help lower the taxation rate – possibly even a zero percent capital gains tax depending on the income tax bracket into which you fall.
Q: How does Social Security come into play for women? What do they need to know?
[Suttenfield]: Social security is highly important for women. Generally, women have lower earnings throughout our careers than our male counterparts. Therefore, even those women who do receive pension benefits will likely receive a smaller monthly payment from their retirement. This can mean their social security monthly income and keeping up with social security changes, play an even greater role in post-retiree budgeting and planning.
Q: What resources do you recommend for women who want to learn more about investing?
[Suttenfield]: Our website (centralinvestment.net) is a great place to start to learn more about investing. You will find calculators, explanations of investment terms, blog posts that include actionable tips, and more. There are so many incredible personal finance books; basic and in depth, available to you. A couple of my favorites to get investors started are: “The Psychology of Money” by Morgan Housel and “A Wealth of Common Sense” by Ben Carlson.
About Amie Suttenfield:
Suttenfield’s interest in saving money and budgeting began when she landed her first job as a teenager. When she began her Career with Central Investment Services, Amie realized how much she enjoyed helping people, especially when it comes to pursuing financial goals. She says it is and honor as a financial advisor to have the unique opportunity to become a part of our client’s circle of trust. She takes the opportunity very seriously. She is an LPL financial advisor with more than 20 years of experience. She resides in Central Missouri with her family.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Category: Wealth Planning