Do not rely on the man in your life, or the future man, to provide your financial security.
With the deck stacked against you in so many ways, you must form your own plan. For the litany of challenges you face, look at what the statistics say.
*On average women earn 25% less than men. *Women have smaller pensions and social security benefits. *Women, on average, live 10 to 15 years longer than men. *Almost 1 in 4 women is broke within two months of her husband’s death. *The average age of widowhood is 56. *Over 75% of women are eventually widowed. *87% of the adults living in poverty are women. ***At some point in their lives 90% of women will be in charge of their own finances.
Now isn’t that enough to make you sit up and take notice? All is not lost however. Now for the good news, again, based on a number of studies.
** Women tend to focus on the longer term. **Women tend to make fewer investment mistakes than men. **Women earn higher investment returns than men. *Women are starting new businesses at twice the rate of men.
So, what to do? The place to start is education, no matter your age. Educate yourself on investments, retirement planning, tax and estate planning, and all those areas that will help you become a better steward of your life situation. There are a myriad of good books and websites that will help you.
Do I mean you need to become a walking talking expert in all phases of financial planning? Not by a long shot, unless you want to. For most a good overview is sufficient. After all, financial planning and successful investing is not rocket science.
After a period of time you may feel proficient enough to do a great deal for yourself, or even all of it. Or you may feel the need to retain a professional(s) for a full time, full service engagement, a one time advisory session, or any number of ways in between.
The time to start is now, because you are not getting any younger, and life is not getting any cheaper. I am convinced that each of us, women especially for the reasons cited above, must take that proverbial old bull by the horns, or, the cow by the udder, (ouch), and take the necessary steps to provide a lifetime of financial freedom and security.
*WIFE: Women’s Institute for Financial Education
**Oppenheimer Funds, 1992 Report – Women and Investing
***Business Week Investor December 1999
A Man Is Not a Financial Plan is a trademarked phrase and is used with permission of the non-profit Women’s Institute for Financial Education (WIFE.org).
By: Steve Hood
Posts Tagged ‘Retirement Planning’
Interactive Whiteboards Lessons – Parts Of Financial Planning
January 16th, 2010
Financial Planning includes:
1) Investment-Planning
It is done to increase your financial resources. Once you have enough money to take care of emergencies, you should start investing your money. It includes risk profiling, creation of investment portfolio, assets allocation, creation of wealth, periodical review and re balancing.
2) Tax-Planning
It is done to reduce tax liabilities. It includes: calculating your gross total income from all the heads of income, computing the total tax payable and then minimizing your tax by adopting certain tax saving schemes and a right mix of investment options.
3) Education-planning
It is done to arrange funds for higher education of self or the children.
4) Cash-flow-planning
It includes analyzing the present income and expenditure and then drawing a plan to maintain a regular flow of cash to meet daily expenses.
5) Business-Succession-planning
It includes systematic and affordable transfer of a closely held or a family business to the next generation.
6) Insurance-Planning
It is done to take care of the Dependants and financial losses
7) Children’s-future-planning
It is done to secure your child’s future by arranging funds for his higher education and marriage. It should be started as soon as your child is born. If we assume the inflation rate to be 5%, then the degree which cost RS 2.5 lacs today may cost RS 6.3 lacs after 17 years
Retirement-Planning
It is done to secure your life after retirement by arranging funds for your post retirements needs and maintaining your living standard. Generally people are not concerned about there retirement at an early stage of there career. But in order to meet future expenses and maintain the same living standard, it is advisable to start planning as soon as you reach the age of 25.
By: Himanshu Sharma
How To Do Retirement Financial Planning
January 13th, 2010
There has always been a need for retirement planning and today is certainly no different. There are 401(k)s and many other types of retirement plans that are available to you. You will need to take the time needed to evaluate what your current financial needs are and what you expect the future to hold.
Recent events, such as the rise in energy costs and the ever-skyrocketing health care costs need to be factored in. Although gas prices have been fluctuating lately, I think they are going to go back up, possibly even surpassing the extremes we saw all too recently. These types of events can take a toll on your retirement plan very quickly. Prudent planning begins early and you need a good source of information. Websites like [http://jag-info-resources.com/retirement/] are an excellent resource to go to find answers to the questions you may have.
Did you know that most retirement plans have a ceiling of 10% of your pre-tax wages that you can contribute? While that may sound good when you view it against a 2% inflation rate, you must keep in mind that your planning today is not just for the ideal future, but the future that will be reality for you if things turn out to not be ideal or according to your plans today.
By starting early and contributing the maximum that you can afford, you will have a better chance of being prepared for the unforeseen. This is made much easier today because your 401k plan is now transferable from one employer to another. This allows you to continue to grow your retirement account even when you choose to change jobs or even careers.
Unsure of what you will need for retirement? There are calculators like the one at my site as shown in my author box below that will help you figure it out for yourself. This is a helpful tool that lets you see if you are on track or not. Don’t forget that life expectancy is getting longer. When Social Security was passed in the 1930s people lived about 2 years after retirement. Today you can expect to live 20-30 years past retirement and, suddenly, the amount you need to retire comfortably with a major change in lifestyle gets very large.
Lets say that today you need $40,000 to live on and you retire in 20 years, you will need a minimum of $850,000 to carry you through retirement. That is assuming that you will live an additional 20 years after you retire and are in good health. There is something to be said for debt reduction as being part of your retirement planning, as well, since the last thing you want to do is go into retirement with a ton of debt still hanging over your head.
Having $40,000 a year to live on with little to no debt will obviously go farther than if you still have the same debt load as you do now. If you reduce your debt load by the same amount that you save for retirement, you double your retirement savings.
One cannot have a conversation about retirement without the subject of taxes coming into it. The money you put into your 401(k) is pre-tax so you will pay taxes on it when you get disbursements. The 401(k) is intended for retirement, so there are also very heavy tax penalties if you withdraw any funds before you turn 59.5 years of age. If at all possible, do not make any early withdrawals from your retirement account, since most people have found that in addition to the heavy tax penalties for doing so, the prospect of paying it back, even with good intentions, is tougher than it seems.
By: Jon Arnold