It may not be fair, but it remains true. Despite advances in workplace equality, women still make about 80 cents for every dollar that men earn. Combine that state of financial affairs with taking time out from the work force to raise a family and many women face a lower bottom line of savings, Social Security income, and retirement benefits.
In addition, women in general live longer than men, thereby requiring a larger retirement net. Statistics also indicate that roughly 50 percent of marriages end in divorce. All this boils down to another simple truth: Most women will be solely responsible for their finances at some point in their lives.
Take a few basic measures now to protect yourself. If you are working, participate in retirement programs offered by your employer, including 401(k) plans, company matching plans and other tax-deferred contributions. If at all possible, contribute the maximum amount to your 401(k) or IRA. Even if you work part time, you may contribute 100 percent of your earnings up to the $15,500 limit. If you are an at-home spouse with a working husband, consider a separate retirement account in your name.
Social Security and pension benefits will contribute to your retirement income but don't count on these resources for all your future living expenses. Remember, you're only going to get back what you put into Social Security; for many women, that may not add up to a comfortable monthly sum in retirement.
Learn all you can about investments and become acquainted with your risk tolerance. In order to make up for years spent at home or working part-time while raising children, you may need to take a more aggressive route to building that retirement account. Returns on riskier investments could close that financial gap, but they could also widen it. Always make sure that your investments are within your range for risk tolerance. Historically, the stock market may have provided higher returns in the long run, but there is no guarantee that this will happen in the future. You may feel better investing in low-risk money markets, certificates of deposit or bonds.
Take an active role in managing your family's finances. It's never a good idea for just one person in a relationship to have all the fiscal responsibility, regardless of gender. Know as much about your family's investments, savings and earnings as your partner and make financial decisions as a team. Regardless of marital status, it's wise to reduce or get rid of as many debts as possible. If you find yourself suddenly single, take a long hard look at your financial situation, track how much you spend and what you're spending it on. Then pay off any high-rate debts, like credit cards, and work on reducing other obligations.
Seeking the help of a qualified professional financial planner might also be one investment that will ultimately pay off for you.
