4 Tips for Financially Independent Women

Is there a meaningful difference in the way men and women consider money? There is, according to a study published in a recent issue of Social Indicators Research.

Women associate money with love and emotion, according to the research, while men are twice as likely to link finances to independence and power. While the differences are not mutually exclusive, researchers hope the general findings will help people better understand their relationship with money, which may lead to better-informed financial decisions.

“Also, it’s helpful to remember that, historically, women haven’t had control of their own financial destiny; and that includes many women who are retired today,” says Leah Miller, a financial and Medicare expert, and CEO of Red Anchor Wealth Management (www.redanchorretirement.com).

“Despite the fact that women control most of the economy today and tend to be the CFO of most households, many continue to get the short end of the stick – especially when it comes to retirement. Women live longer and are often the ones to find out that they’ve outlived their money.”

Speaking directly to women, Miller offers context on how to face emotionally the stress of financial planning for retirement.

Make the most of your time on this Earth. A long life shouldn’t be a bad thing. If you’re married with a husband, you’ll likely enjoy many years together sharing Social Security, a pension or IRA income and other sources. However, much of that money won’t be there should you outlive your husband. Many women may be prone to avoiding thoughts of life after their spouse moves on. While that may be romantic in a sense, Miller says, it is highly impractical if you’re trying to live a long and fulfilling life.

Money keeps women up at night. People don’t like to think about the things that cause them pain. For women, the stress of an uncertain financial future is a huge pain. While there is a way to feel much better about this uncertainty, millions of women avoid troubleshooting this latent and palpable stressor. It’s like someone who is desperate to lose weight but is too afraid to step on the scale.

Anxiety is worse than actually taking care of the problem (getting started). If you are the family chief financial officer, then abstracting a future budget is an easy step to start with. The important goal of retirement planning is to craft an income stream that will sustainably support your needs, so start accounting now. Make a balance sheet that includes your savings account, retirement accounts, 401(k) plans, investment real estate, stocks, bonds, mutual funds, annuities, cash value life insurance and other assets. Then break it down further by pre-tax and post tax-accounts.

Don’t take your estate for granted; beware the pre-Medicare timeframe. Some women have it better than others, but beware of overconfidence, because you can fall ill anytime. For example, the average couple who retires at age 62 will spend $17,000 out-of-pocket on health care each year until they enroll in Medicare. And, that’s basically the cost of the premium, so even in good health the price is very high. A nice nest egg in combination with other assets can be depleted rapidly with insufficient Long Term Care insurance.

“Some of these considerations may be unpleasant, but what’s the alternative?” Miller says. “Don’t bury your stressful feelings. Instead, do something about it. You’ll feel better and you’ll be better off as you move forward.”

Leah Miller is CEO of Red Anchor Wealth Management, (www.redanchorretirement.com), a client-focused firm that tailors plans to individual and family needs. She holds Series 7 and 66 securities licenses, and is a certified National Social Security Advisor. She continues to expand her practice by finding clients who share her philosophy that life is about loving others and enjoying life.