Beyond having less cash available for investments, earning less also often results in thinner pensions, smaller social security payouts, and fewer benefits. Another employment-related issue is that women may take some years off from their jobs to raise a family. Those years out of the workforce can result in decreased pension contributions, decreased pension benefits due to fewer years of service, and the obvious decrease in earnings and savings. In addition to the cost in hard dollars, being out of the workforce often means lost seniority and promotions. These, too, may affect retirement benefits.
Investment style is also a consideration.
Women tend to invest more conservatively than men. While relative safety may be prudent for some investors, for many younger women, an extremely conservative portfolio may fail to keep up with inflation, let alone accumulate a healthy nest egg. It is vital that women realize their financial planning needs may be different from those of the men in their lives. For a review of the planning strategies most suited to your situation, give us a call today. Step 1 - Pay yourself first.