For women, there's a lot to gain from being actively engaged in the planning of their financial futures.
Women tend to live longer than men and yet receive only 80% of the retirement income that retiring men receive, according to the National Institute on Retirement Security.
"Women typically live longer than men, while also earning less for similar roles," said Kimberly Bridges, director of financial planning at BOK Financial®. "More so than men, women have lessened earning opportunity by being out of the workforce due to caregiving obligations—like children or aging parents."
According to a recent OnePoll survey sponsored by BOK Financial, only 11.45% of female respondents reported resonating with the comment, "I feel pretty confident that I know all I need to successfully manage my money."
"To achieve financial empowerment, you must be in the driver's seat of your finances," Bridges said. "Building your savings and retirement funds, reducing debt and ultimately achieving financial independence all start with a plan."
Zooming in on what that plan entails, Bridges suggests focusing on five areas:
1. Get a handle on your financial situation.
- Examine your income, expenses and savings to determine where your money is going.
- Build a statement of net worth and track yearly. Are you building wealth or simply treading water?
2. Set financial goals and save accordingly.
- Start with a plan to pay off debt and establish an emergency fund that will cover six months of expenses.
- Plan for large expenses such as education, home improvements and car purchases.
- Make retirement savings a priority.
- When you are ready, turn to a trusted advisor for help in determining the amount to save toward your goals.
3. Make an estate plan.
- At a minimum, you should have a will. This is especially important if you have children because you need to name a guardian.
- Review the beneficiaries on your insurance policies and retirement accounts to ensure they are correct, as these designations trump the will.
- Use joint titling with rights of survivorship carefully. While sometimes used for convenience, it is important to know that if you die, the assets will automatically pass to the joint owner rather than to the beneficiaries named in your will.
- As you get closer to retirement, other considerations should be addressed.
4. Plan for healthcare costs, now and future.
- If using a high-deductible health plan, fully fund your Health Savings Account and consider holding it for health care expenses in retirement.
- Make a plan for health insurance if retiring before age 65, when Medicare eligibility begins. Study your options and understand how Medicare works with your employer-provided plan, if still working at 65.
- Consider how you will cover the cost of long-term care, if needed.
5. Review your Social Security claiming options.
- Consider strategies to maximize income for your surviving spouse.
- Understand the impact of taking early benefits.
Dig deeper on these tips and more with the financial planning team at BOK Financial.