Women face different financial challenges than men do. They still only make about 76 cents for every dollar men do, and they are also more likely to take time off during their careers to raise children. Furthermore, women also invest less aggressively than men do.
All this results in financial hardship for many women later in life. Susan Black, director of financial planning at eMoney Advisor, offers these tips for women hoping to improve their finances:
- If you're married, don't leave the financial planning to your husband alone. "If your husband is taking the lead, that's fine. But stay involved as an equal," she says. Discuss your savings options with your husband and learn your financial options.
- While the rule of thumb is that you should save 10% of your gross income each year, Black says that women should save 12%. This is to account for their longer life expectancy and the loss of wages many women face when they raise their children.
- If you're a stay-at-home mom and your husband works, open up a spousal IRA in your name. Your husband can contribute to it on an annual basis, and you'll both have more money during retirement.
- Make sure you have enough life insurance. Half of all marriages end in divorce, and three quarters of all women are eventually widowed. Have enough life insurance to cover at least five years of income.
- Invest in long-term disability insurance. An unplanned illness or accident can cripple your finances. If your employer doesn't offer it, obtain individual coverage through an insurance company.
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