Financial tips for women

Women have been hit harder by the pandemic financially than men. March is women’s history month and the perfect time to help the women in our lives take control of their money. Local financial expert professional Barry Bigelow from Great Waters Financial has tips on how they can take control of their finances.

During the pandemic, women lost jobs at a higher rate than men. To add insult to injury, women haven’t recovered those jobs either – they’re actually still losing them! There are several reasons for the substantial job losses. Women are the primary caretakers of children, their aging parents and relatives. Women are also more likely to work in social sectors like retail, hospitality and tourism, all of which were hit hard when the pandemic began.

It’s important for women to remember that they have a say in their financial future. Every couple decides how they split up household responsibilities, and it’s not uncommon when we meet with a couple that the wife will defer to her husband because he’s been handling their finances throughout their marriage. But when trying to plan your financial future with your significant other, both people have goals and dreams for their retirement. And all of them need to be equally considered in the planning process.

It’s crucial women take a more strategic approach to their retirement, especially considering 5.4 million women have lost their job since the start of the pandemic and women in the workforce are paid less than men. If you are currently employed and have an employer-sponsored retirement plan available to you, I recommend dedicating at least 5-10% of each paycheck to your 401(k). If you don’t work outside the home, you can open an IRA as long as you and your spouse file a joint tax return. You can contribute up to $6,000 to an IRA this year. If you’re 50 or older, the contribution limit goes up to $7,000.

Social Security is already nuanced, but women really need to understand how their Social Security benefits will change if they outlive their significant other. For example, one spouse’s monthly Social Security benefit is $1,200 a month, and the other spouses’ benefit is $600. Their total monthly income from Social Security would be $1,800. If one spouse passes away, the surviving spouse will receive the higher of the two benefits, in this case, $1,200. That may sound like a win, but that is a loss of $600 in monthly income in retirement. There are several strategies for claiming your Social Security benefits. Make sure you sit down with a financial professional to determine what’s best for your situation.

Always continue to learn. There are so many resources for anyone to learn more about financial planning. Great Waters Financial encourages everyone to pick up a personal finance book, attend a class or seminar or meet with a professional who can explain all the pieces of a comprehensive retirement plan. At Great Waters Financial, education is a key component of retirement planning. They help clients understand all of the choices they have to find a path that’s right for them. To learn more about our planning process, follow Great Waters Financial on Facebook and LinkedIn.