Retirement Planning For Women – Why Work With A Financial Planner Specialising in Financial Planning For Women?
Some people dream of retiring at a certain age, but when they get there, they find that they do not have sufficient financial independence to do so, so they are forced to continue working. A lesser percentage expect to retire at a certain realistic age, but after some financial planning, realise to their surprise, that they can do so way before their targeted age.
The latter is a story of one of my earliest clients, who is a teacher. When she met me at the age of 30, she told me she doesn’t want to teach forever and she was working towards the expected retirement age of 65. After I did some financial planning with her, we managed to shave off 10 years from her minimum retirement age. Now she is able to retire at the age of 55 if she wants to. She also has no fear of her money running out and she has a sense of security in her financial plans.
Not all advisors work the same way. Finding one who understands your point of view is half the battle won, especially if you are someone who struggles to open up about money issues. Could a general advisor have done the same for my client? It is likely, but I believe there are advantages working with a specialist financial planner for women.
A financial planner specialising in planning for women will:
1. Understand the financial risks faced by women
Due to cultural and societal practices, women face additional risks in their financial journey that a general advisor may easily overlook. For example, in my practice, I’ve observed that very often, the focus in retirement planning is on income creation or rate of return (with good reasons, of course) but the mitigation of risks is often neglected or addressed as a “by the way” add-on. This neglect could be due to a lack of awareness or understanding, and not many financial advisors specifically understand the types of risks women face in retirement planning. Yet, it is so vital as women could be left very vulnerable because of certain disadvantages.
The 5 major financial risks women faced in their retirement include caregiving risk, health risk, inflation risk, over-giving risk and longevity risk. Individually, these risks can pose a danger to any good retirement plan and collectively, they can devastate even the most well planned out retirement. Therefore, even as we focus on creating as much retirement income as possible, women cannot expect a successful retirement without mitigating these risks.
If you want to review and plan if you are “retirement ready”, you can sign up for my Retirement Clarity Package that I have designed.
2. Related and Relatable Experience
A financial planner who has experience working with women in their financial journey will be quick to identify and address their needs. For example, my single female clients want a financial plan to ensure they can remain independent and have a place that they can call their own. They are not as worried about longevity, but they worry about losing their independence while they are alive. On the other hand, my married clients, especially those with children, are concerned about not being a burden to their spouses and children if they should fall sick and aim to be financially supported. With this group, I would advise basic insurance, education savings (to provide a good education for the children so that they can take care of themselves in the future) and lots of retirement plans.
Being a women myself and having served many clients with similar needs, I am well equipped and able to quickly advise both groups, amongst other demographics on what to do. Refer to my article on how should women who are single plan if you would like to read more about this.
3. Have empathy for women and their struggles
It is important for a financial planner to understand that when it comes to retirement planning for women, each financial situation is unique. Each woman is often wearing multiple hats, and her financial planning needs to take all of that into consideration.
A good specialist financial planner for women will understand their health concerns and the stress of their jobs. For example, there are specific illnesses that are unique to or more commonly occurring in women, such as breast and ovarian cancers. In matters like these, it does take one woman to know and understand another. Another woman would instinctively grasp that being diagnosed with a terminal illness means that all dependents, including the young and old, would be affected, as women tend to make up the majority of carers. Hence, the financial planning needs to take these into consideration.
Some women may also be embarrassed to broach the topic of women illnesses with a male financial planner, such as breast or ovarian cancers and this sensitivity is understandable. One of my clients was diagnosed with ovarian cancer and she was thankful that I kept reminding her to go for her timely health screenings which included a mammogram.
When this topic is broached, woman to woman, the client sees the wisdom in planning for these and appreciates when it is included in the list of considerations.
4. Take into consideration women’s emotional attitudes towards money
Men and women see and think of money differently. Men tend to be more objective when it comes to money, but because women invest much of their finances into their relationships, they tend to be more emotional when making decisions. For example, a woman is more likely to set aside money to take her parents on a holiday or pay more than she has budgeted on a gift for a loved one.
Some women need to save because it gives them a sense of security. Some women need to spend to have the motivation to save. It is usually not about the accumulation of the money, but what she is motivated to do with the money and who she is motivated to provide for. A financial planner who instinctively understands these needs will be able to formulate a plan that can help the client to work with her natural inclination.
5. Understand that women gravitate towards stories over facts and figures
Women relate better to stories and examples rather than hard numbers, because they tend to be more emotional and have greater empathy. Most of my female clients generally understand the need to invest and they want to be successful investors so that they can meet their long term goals like maximizing their retirement income for example.
One of the examples I like to use to assure my clients who are worried about the market not doing well, is using the analogy of a beach ball in the water. You can push it down, but when you let go, it’s buoyant so it will eventually bounce back up. I encourage them that when they are in it, it is difficult, but the best thing to do is to hold on and soon they will see the turnaround. Also, I use the gardening analogy to help my female clients to confidently hold on to their long-term financial plan, by sharing that time is needed for the seeds to take root and they will not grow if you are pulling them up every day to check on the roots.
Stories can help my women clients to understand better but ultimately, what is important to them is to feel understood.
With all these in mind, I hope you have found some useful tips to help you choose a financial planner that can lighten your retirement planning load. I believe that planning your own retirement (ensuring that you have enough) is not a “DIY” project unless you are trained to do so. Working with a financial planner who can understand and empathise with your struggles will save you much time and explanation.
While not every woman can successfully plan to have that dream retirement of sandy beaches by the sea and round the world travel every day of the year, it is my belief that all women can have enough lifetime income to provide for the basics in retirement.
With International Women’s Day coming up in March, I have planned a webinar that would be ideal for you to understand more. It will be a step into your retirement planning, and ensure it is aligned and updated with current needs. Click HERE or the image below for more details.
Article by Lee Meng
The writer is an Executive Financial Services Consultant of GEN Financial Advisory