Financial independence is a fundamental human need. However, women often face unique financial challenges that may reduce their financial independence. Empowering women financially is not only beneficial on an individual level but also contributes to the overall economic growth and development of our society.
Every woman must have access to a trusted financial professional to help guide her towards financial independence. Partnering with a financial professional who specializes in working with women can help address the unique challenges they face while enabling them to articulate their vision.
They assist women in defining and outlining their goals, whether they focus on retirement, building an emergency fund, financing children's education, leaving a legacy, or other personal investment objectives. They will start by helping their female client to:
- Evaluate their current financial situation
- Identify short-term and long-term financial goals
- Develop a comprehensive, customizable plan
- Implement the plan and monitor progress
- Manage risks
- Create legacy plan
It pays to take a look at the current state of your finances even before you meet with a professional. Access our professional women’s checklist to determine some areas that may need your attention.
Unique risks require unique strategies
Women often face unique circumstances that can create barriers to their financial independence. A financial partner will address these risks through strategies appropriate to her situation.
Gender income disparity
Income inequality between genders persists in our society, which can reduce a woman's ability to accumulate wealth compared to her male counterparts. A financial partner can help her navigate this disparity by recommending:
- Strategies to reduce debt
- Increasing savings
- Investing in appropriate vehicles
- Building a financial safety net
Time away from work
Women are more likely to have gaps in their employment due to maternity leave or caring for family. These interruptions can have a major impact on a woman's earning trajectory, retirement benefits, and savings potential.
However, a financial partner provides guidance on how to compensate for these work interruptions and limit their financial impact. These strategies may include:
- Increasing contributions to retirement accounts while working
- Investing in flexible financial products and strategies
Financial impact of divorce
Divorce has significant financial implications, and women often bear the brunt of these. Legal fees, loss of income, property division, and often the primary custody of children may result in a financial strain for women. A financial professional can provide crucial assistance during this difficult time, guiding women through processes such as:
- Dividing marital assets
- Deciding on child support and alimony
- Planning for single-income living
The role of caregiver
Women often serve as primary caregivers for both children and elderly parents. This responsibility could lead to additional financial strain from healthcare costs, potential income loss, and the need for flexible working conditions. A financial partner can provide guidance on:
- Financial products
- Strategies that address unique needs
- Long-term care insurance (LTC)
Widowhood
The death of a spouse can be an emotionally devastating time. Dealing with financial issues often adds a layer of stress during such a difficult period. A financial partner can:
- Provide support during a difficult time
- Offer guidance on managing and liquidating jointly held assets
- Provide guidance on insurance policy payout and beneficiary updating
- Discuss estate planning
- Other key financial matters
Longevity risk
With longer life expectancies than men, women may face a higher risk of outliving their savings. Being the steward of their financial resources over the long term requires appropriate strategies to manage their wealth throughout their lifespans. A financial partner can:
- Guide long-term care insurance
- Recommend investment strategies
- Design a plan to mitigate financial risks associated with longevity
Creating a legacy
A financial partner can help women align their investments with legacy goals, whether it's creating an estate plan, establishing an endowment, or implementing giving strategies. They will collaborate with legal and tax professionals to implement a plan that addresses legacy and tax issues while advancing her goals.
Wealth transfer
With shifting demographics and growing economic power, women are often at the forefront of wealth transfer and decision-making. Managing the transfer of financial assets is complex. A trusted financial partner can provide guidance on appropriate wealth transfer strategies as they work toward efficient processes and desired outcomes.
In light of these unique financial challenges, it's clear that women can benefit greatly from working with a trusted financial partner. The guidance of a financial professional is not just an asset—it's a necessity. From providing strategies to navigate financial disparities, plan for work interruptions, address the financial consequences of divorce, mitigate risks, plan for leaving a legacy, and wealth transfer strategies, every woman can benefit from working with a trusted financial partner.
Take the first step towards financial independence by accessing our professional women’s checklist today.
Important Disclosures:
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by Fresh Finance.
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