WOMEN IN BUSINESS: Are women really taking the financial driver’s seat?

When it comes to investing, many women are forced to do more with less. Because of their longer life span, women have an even greater need than men to make the most of their retirement dollars.

The single smartest thing a woman can do is to begin saving earlier and investing more aggressively. One recent survey showed that only 46 percent of women between the ages of 46 and 64 had started saving for retirement before they turned 40, compared to 67 percent of men.

When women do invest, statistics show they tend to favor less aggressive investment vehicles over more aggressive vehicles. In a Yankelovich survey conducted in 1997, three-fourths of the women surveyed said they always favor safe investments, even if it means getting a low return. In another recent study, only 26 percent of the women polled said they were willing to take substantial risks to earn substantial gains, compared with 45 percent of the men.

Historically, even in households where women were responsible for paying the bills, men handled most of the investing. Even today, there are women who equate “marrying well” with “planning for the future.”

But even a “profitable” marriage can end through divorce or death, and experts estimate that about two-thirds of all women will at some point in their lives be wholly responsible for their finances.

As primary caregivers, women tend to have more career interruptions (they often leave their current career to assume caregiving responsibilities) and generally cannot rely as heavily on company-sponsored insurance and retirement plans as men. Women average about 11.5 years out of the workforce, versus just 1.3 years for men, and they stay with an employer 5.8 years, compared to 7.6 years for men. As a result, women who do qualify for pension plans–and nearly 12 million women work for small firms that do not offer any kind of pension–often have less money available to them.

Clearly, women would do well to start early and save often. The earlier a savings plan is established, the less money that is needed overall because the funds have more time to grow.

Younger planners also can realize advantages by purchasing life insurance early, because life insurance typically costs less at earlier ages. Life insurance can be an extremely beneficial tool for women of any age.

Women who do not qualify for company-sponsored plans, due to career interruptions or short tenure with an employer, would do well to explore this option. In addition to providing benefits to survivors, the insured can sometimes borrow against a policy to realize dreams such as paying for a child’s education or starting a business. A good agent can help explain the options and structure a plan to meet a variety of needs.

Other steps women can take toward financial self-reliance might include:

Establishing solid goals-Be it a dream home on a lake or a comfortable condo in the city, concrete objectives give you something tangible to strive for and make it easier to assign a price tag to goals.

Assessing your financial position-Take a critical look at finances, especially with regard to life goals. Consider asking an objective outside advisor for help in calculating where you stand. Know what investments you have and how much they are worth.

Seeking good financial advice-Look for information wherever available and never hesitate to ask questions.

Create a solid portfolio-Investors should start as soon as possible to research financial information and start saving. Even seemingly small amounts of saving can build future stability and eventual wealth.

Team up with an advisor you can trust-Seek opinions from many different people and remember that good financial advice requires time and patience to explore opportunities and build a level of knowledge that leads to good decision-making.

For both women and men, it pays to create a clear vision of one’s financial future, both in terms of a better-focused, less stressful today and a comfortable, more prosperous tomorrow.

Robert Gingras, CLU, ChFC is a Financial Representative in Traverse City with the Gingras Group of the Northwestern Mutual Financial Network based in Milwaukee. BN

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