| The Companion Advisor: General Interest|
Women and finance: An ever-changing world
Women have special needs when it comes to financial planning. On average, they earn less than men and are more likely to take time out of the workforce to raise children or take care of elderly relatives. But they also live longer, making the need to save even more important. Your financial advisor should recognize these differences and understand that every woman needs to have a financial plan.
With 43 per cent of the workforce comprised of women, it is clear that families need the income of two people often just to live comfortably. Women's contributions to their family are valuable even when they don't work outside the home. Many women are working mothers, with dependent children and therefore, if your family relies on your income to make ends meet, it is critical for you to be properly insured.
Your financial advisor can help you to choose an appropriate level of insurance. While many couples approach financial planning as partners, it can be valuable for women to draft an individual plan to look at their own financial wellbeing.
Often, the task of caring for young children or for older relatives falls to the women of the family, and when this happens, your financial advisor can help you plan for your dependents. If you are spending time out of the workforce, your advisor can help you budget for reduced family income. If your main concern is the education of your children, you should know about RESPs and other methods of saving for a child.
The cost of elder care is another thing that is increasingly falling to families. Ask your financial advisor how insurance can be used to cover long-term care by planning ahead. You may also be able be able to save in an investment account that will be dedicated to caring for an elderly parent.
These days, it is not uncommon for a woman to end up alone or as a sole parent, either as a result of divorce or the death of a spouse. If your spouse dies, their assets can be frozen until the will is settled. It is advisable for women to know and understand the details of their family finances and to take control of their own money.
Some points to consider:
On average, women live approximately nine years longer than men. Whether those are good years will depend on your health and your ability to save for your retirement. If you are working, you ought to be saving for retirement, even if it is only a few dollars per month, and the most effective way to do so is with an RRSP.
This article is reprinted with the permission of the Canadian Association of Insurance and Financial Advisors (CAIFA), www.caifa.com.
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