Did you know that 40% of women ages 55-70 are very confident they have made the right (financial) decisions in the past few years, which was found in a recent survey by Ameriprise Financial? According to another recent study, men are more likely to make changes to their 401(k)’s versus women, meaning that men react faster than women when it comes to making financial decisions. Another interesting fact found in this study is that because women are less likely to make changes to their portfolio, women, overtime, earn a better rate of return compared to men for that reason.
What does this mean? It means that women have the tendency to make smart financial choices, including seeking out professional help and guidance so they are more likely to succeed. Having low confidence and being slow to react to the market appears to be a positive characteristic.
On the other hand, there are different factors that women in particular have to consider when planning for retirement, due to the simple fact that women face different retirement challenges than men. For example, women tend to live longer than men and need to save longer for retirement. This means that it is even more imperative for women to factor in added costs such as taxes, inflation, or long-term care insurance. Another major factor that interferes with a women’s ability to save is that many women temporarily leave the workforce to raise a family or care for aging parents. If you are a married couple and your husband passes way, do you have a survivorship benefit? How much Social Security will be lost? Do you have an income replacement plan?