 The Companion Advisor: General Interest
Women and finance: An ever-changing world
From the Canadian Association of Insurance and Financial Advisors (CAIFA)
A Companion Advisor article
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:
· Make sure you and your spouse have a will and know what is in it
· Know whether your spouse is insured and with what company
· Know the location of important papers, such as wills, and find out where
investment certificates are kept
· Keep a list of the institutions where you and your spouse have accounts
· Have your own bank account
· Establish your own credit rating
· Keep a list of any assets you have brought into a marriage, including
furniture, an inheritance or a large amount of savings
· Establish your own retirement savings plan. If you do not work outside
the home, insist that your spouse contribute to a spousal plan, which
amounts to good tax planning for both of you
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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