Retirement Issues Every Married Woman Should Know

The 30 Trillion Dollar wealth transfer currently controlled by the Baby Boomers will mostly be controlled by women in the future according to Forbes.com. Regardless of gender, whenever there is a transfer of money, is typically due to the fact a loved one is no longer with us on earth. Everyone should take the time to grieve appropriately. And during this time sometimes people forget to handle their finances accordingly, which could be detrimental to building wealth.

Yet, women have superpowers of their own being able to focus on details, and are typically the more patient gender according to Moojan Ghafurian and David Reitter of Pennsylvania State University. As a result, delaying gratification is one of the most important items that investors must attempt to master to have their money compound over time.

Women have all the tools to be great investors, but there are some financial blunders that they must be aware of to ensure they can invest their money in a manner that allows them to ensure they don’t outlive their assets.

Which is one of the greatest fears of all retirees. This leads women to seek out guaranteed income, which is going to lead them to invest in products like life insurance or an annuity. According to Barron’s women seek to have approximately 90% of their retirement expenses to be covered by “guaranteed income” sources. And with Social Security only typically covering 30% of retirement expenses, it leaves those who are seeking guaranteed income to possibly be building a financial strategy around fear, rather than setting a solid foundation to secure their future.

This is leading all investors to focus on buying products to secure their retirement rather than building a strategy to determine what financial instruments are going to be required to make sure that someone is able to achieve their financial goals without putting their financial well-being at risk.

It’s not the investor’s fault because over 50% of American households rely on mutual funds as their primary investment strategy.

Yet, this is not allowing investors to be able to diagnose any shortcomings within their investments because you’re not able to make strategic adjustments inside of a mutual fund without essentially having to trade it for another mutual fund. As a result, this could lead to female investors making decisions that could be detrimental to building wealth. Especially during times of economic downturns.

During “Bear Markets” when the overall stock market takes a decline of 20% or more. This is when financial professionals who sell guaranteed income products get excited. Rather than focus on building a strategy to take advantage of the opportunities the market presents, they are able to sell a ton of products while investors are fearful. And with women living longer than men, it is important to make sure you’re not getting too conservative too early.

As retirement approaches, yes it’s prudent to make sure that you’re not taking too much risk so that you don’t jeopardize everything you have worked for your entire life.

However, once you achieve your goal of retirement, your investment strategy still needs to evolve over time to make sure you’re outpacing inflation which is part of the “Investor’s Misery Index” that regardless of what’s happening in the world, pesky price increases are always going to be part of our society.

The best step for women to take when it comes to retirement is to first develop a plan, figure out exactly how much money they need to accumulate, and how much they require that money to grow, and from there once you figure out the underlying variables, you can then determine what investment strategy and products will be able to help you towards a successful retirement. Unfortunately, we live in a world where convenience is paramount with our lives being busier than ever. Yet, when it comes to building and maintaining wealth, the easy route may not be the best way to get to your destination.

To Growth, Family, and Philanthropy,

Joshua Krafchick | 369 Financial

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