Joelle Hall
Associate Investment Advisor
Richardson GMP Limited

While the basics of good financial planning are the same for both sexes, we face particular lifestyle and economic issues that require special consideration. On average, we women we earn less; take more hiatuses from employment/earning both for child rearing and caring for elderly parents; and we tend to live longer than men. All of which often adds up to having less money that needs to last longer.

There is also much evidence that supports realizing goals/dreams is much more likely if you have a written plan. Here are six considerations to help you put together a plan so that you are able to live your life, on your terms.

1. Set and prioritize your goals
Create a vision of what is important to you: how you like to spend your time and your money and who you like to spend it with.

There will be many demands on your money: retiring comfortably, educating your children, caring for elderly parents, and supporting the causes you care about. Only you can determine what is most important to you.

2. Work with the right advisor
Find an advisor with whom you feel comfortable. At the very least, make sure they prepare a CASH-FLOW based financial plan for you. You need to understand whether you are on track financially to achieve your goals and if not, what revisions to the plan are necessary to reach your goals.

Given the time horizon women have to plan for, understanding whether or not you are on-track is important, and the earlier you develop a financial plan, the more time you have to make changes and, with the power of compounding, make a significant difference to the potential outcome.

3. Invest with greater confidence
On the whole, women tend to report that they are less confident about investing than men. As such, we tend to be more conservative in our investments. But being too conservative, not to mention shying away from the stock market altogether, can actually leave you more financially vulnerable since your returns may not keep up with inflation and your buying power could actually diminish!

Stick to the basics:

  • invest early;
  • invest regularly;
  • stay Invested; and
  • diversify.

4. Protect yourself
Just as flight attendants instruct passengers to put on their own air masks before placing one on their child, personal finance planning requires the same protocol. Your financial survival depends on “paying yourself first” by saving for retirement. Once your finances are secured, then you can assess your capacity to help others.

If you’re married, you need to have a clear idea of what your spouse has in mind for his or her retirement. For instance, if your spouse decides to take his pension withdrawals early in exchange for a lower survivors benefit, this may have a significant impact on your income if he predeceases you and you receive a reduced benefit for the remainder of your life.

5. Set a limit on helping kids
Many feel it is important to finance their kids’ education but it can be financially draining if you don’t plan carefully or if your financial circumstances change dramatically due to job loss/change or divorce.

Analyze whether paying for your children’s education will impede your ability to retire comfortably and maintain the lifestyle you want throughout your lifetime. Your children will have a number of working years to pay off education costs, you may not have the same time to catch up on retirement savings.

6. Plan for long-term care
According to Manisha Thakor and Sharon Kedar, authors of On My Own Two Feet: A Modern Girl’s Guide To Personal Finance, “80 per cent of men die married, while 80 per cent of women die single.”

Your financial plan needs to include your expectations about who will help care for you as you age and what financial resources you will have available for your medical and personal caregiving needs. You may want to explore long-term care insurance depending on how much assistance you can expect from family members and the fact that you can probably expect to outlive your spouse.

All material has been prepared by Joelle Hall. Joelle Hall is an Associate Investment Advisor at Richardson GMP Limited. The opinions expressed in this blog/video are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP or its affiliates. Richardson GMP Limited, Member Canadian Investor Protection Fund. Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.