3 Reasons Lifelong Financial Planning Is Vital For Women

Financial planning is important for every American, but it takes on increased urgency for some groups. One such group is working women. Women tend to face a few unique challenges that aren't as often a concern among their male counterparts. What are these? And how can you overcome them? Here's what every woman needs to know. 

1. Gender Pay Gap

Unfortunately, the reality is that women tend to be paid less than men. In 2023, the average rate is 77% of male pay. This is unfair, and while it has improved from years prior, it remains something that women need to financially plan for. 

Women should take a three-pronged approach to beating the gender pay gap. First, raise your rate of savings and investment rather than relying on the same percentages as higher-earning counterparts. Second, make sure you take advantage of opportunities to boost income through career advancement. Finally, work with a financial professional to maximize the money you do make. 

2. Time Off Work

Women also tend to take the brunt of home life burdens, which can weigh on their earning power. Whether it's parental leave, missed shifts for family activities and kids' appointments, or a sabbatical to raise children or care for aging parents, you're more likely to have lower-earning periods.

One way to combat this is to build up more of a financial buffer against emergencies and planned time off. Anyone planning a long period without working should consult with a financial planner to make the best choices during it. And don't overlook the value of good employer benefits. Paid parental leave, for instance, can take much of the financial pressure off of caring for your little one. 

3. Longer Life Spans

One area where women often do better than men is in life expectancy. Living longer is good, but it also means that you must plan for it.

You may need to save more for a longer retirement, including a longer period without your partner or spouse. Start saving earlier, save more aggressively for retirement, and avoid lapses in contributions. Pay attention to your risk tolerance over the years, as well. Someone who may live longer needs to balance higher risk for higher reward and taking on too much risk when they need to withdraw funds. 

Where to Start

Can you use help planning for any of these financial challenges in your life? Start by meeting with a financial planning service that specializes in helping women prepare for a stable, happy financial future. Make an appointment today.

For more information on financial planning, contact a company near you.