Fi­nan­cial plan­ning for women

Grocott's Mail - - OPINION AND ADVICE -

Au­gust be­ing Women’s Month in South Africa makes it ap­pro­pri­ate to fo­cus on some fi­nan­cial plan­ning is­sues that af­fect women di­rectly. While the ba­sics of good fi­nan­cial plan­ning are the same for both men and women, women of­ten face par­tic­u­lar life­style and eco­nomic is­sues that re­quire spe­cial con­sid­er­a­tion.

On av­er­age, women live longer than men. Ac­cord­ing to the lat­est World Health Or­gan­i­sa­tion data pub­lished in 2018, the av­er­age life ex­pectancy for men in South Africa is 60 years and 67 years for women. In the United States, these av­er­ages in­crease to 79 and 81 years re­spec­tively and life ex­pectancy is im­prov­ing rapidly due to ad­vances in health­care. Un­for­tu­nately, health­care costs across the world tend to in­crease at a rate greater than in­fla­tion.

It is clear that no mat­ter where they live, most women would need to en­sure that pro­vi­sion has been made for ad­di­tional re­tire­ment sav­ings so that they don’t out­live their money.

Women some­times have no choice but to take time out of their ca­reers if they wish to have chil­dren, and this ne­ces­si­tates them hav­ing to move in and out of the work­force at cer­tain times in their lives.

In some in­stances, the de­ci­sion is made for the woman to stay at home to bring up the chil­dren.

This de­ci­sion would have a sig­nif­i­cant im­pact on her fu­ture earn­ing po­ten­tial as well as on the amount she would be able to save for her re­tire­ment.

Women also face unique med­i­cal chal­lenges such as cer­vi­cal and breast can­cer. Re­search un­der­taken in the United States re­vealed that 1 out of ev­ery 8 women will be di­ag­nosed with breast can­cer dur­ing her life­time. These dis­eases ac­count for the ma­jor­ity of crit­i­cal ill­ness and dis­abil­ity claims by women.

Threats such as heart at­tacks and strokes, pre­vi­ously as­so­ci­ated pri­mar­ily with men, have now also be­come sig­nif­i­cant risks for women. Sur­viv­ing a crit­i­cal ill­ness or dis­abil­ity can be fi­nan­cially dev­as­tat­ing for a woman if she does not have ad­e­quate re­sources or cover in place.

Sadly, close to half of all mar­riages across the world end in di­vorce. A re­cent study found that mar­ried peo­ple ac­cu­mu­late about four times more wealth than sin­gle peo­ple but, on av­er­age, di­vorced peo­ple usu­ally end up poorer than sin­gle peo­ple. It is of­ten more dif­fi­cult for a woman to ac­cu­mu­late wealth af­ter a di­vorce, es­pe­cially if her ca­reer has been in­ter­rupted at some stage and she needs to re-en­ter the work­place.

To deal with these unique chal­lenges, women need to take an ac­tive in­ter­est in their own fi­nances. They should be en­cour­aged to seek the coun­cil of an ex­pert, some­one who they feel they will be able to trust.

An ex­pe­ri­enced Cer­ti­fied Fi­nan­cial Plan­ner will be able to guide a woman through the fi­nan­cial plan­ning process and as­sist her to achieve the right mix of prod­ucts, thereby pro­vid­ing her with peace of mind no mat­ter what the fu­ture holds.

• Rands and Sense is a monthly col­umn, writ­ten by Ross Mar­riner, a CER­TI­FIED FI­NAN­CIAL PLAN­NER® with PSG Wealth. His Fi­nan­cial Plan­ning Of­fice num­ber is 046 622 2891

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