Prepare yourself for the unexpected l Insightful Investing

By Jeffrey Moormeier | Mar 13, 2019

It is not my intention to enter into a gender debate. This article is intended for the real world challenges women face.

And though it may spark an intense emotion or two, I mean to offer concrete action steps if you find yourself in a situation for which you had not planned.

Fact: 90 percent of women will be solely responsible for their finances at some point in their lives ("6 Ways Women Can overcome the Money Taboo, Forbes June 2018").

Fact: According to the US Department of Labor, research shows that 54 percent of working women are not participating in an employer-sponsored retirement plan ("5 Facts about Working Women and Retirement, www.blog.dol.gov Sep 2017).

The biggest reason for this is that the companies they work for don't offer retirement plans. In this same report, it states "46 percent of elderly unmarried women and widows rely on Social Security benefits for 90 percent or more of their income in 2014."

These facts provide a disturbing backdrop. It is common knowledge that women live longer than men, but have a higher risk of experiencing poverty in their later years.

A smart woman will ask good questions and not leave it to chance.

Most of my clients over the years have been traditional families. For the most part, the division of labor centers around the man making most of the "long-term financial planning" decisions, even though many women are running their family household budgets and day-to-day purchases. I know this is a generalization and is not always the case.

Many of my married female clients are in total control of the money. It is not that uncommon; however, it is still not the majority.

It is my opinion that women should be taking a more active role. At the very least they should be "auditing the course" in the same sense one would audit a college class.

I usually start interacting with most of my female clients during periods of emotional turmoil, such as after a death or divorce. They not only have to process the trauma in which they find themselves but also engage in an arena for which they feel ill-prepared.

Here are some things you can do to prepare yourself for the unexpected:

1: Build a team of trusted advisors. In many cases, the team may already be in place through the efforts of a spouse. In the case of a divorce, a clean slate of advisors is both common and encouraged. Women who use financial advisors are more likely to stay on track. Find a Registered Investment Advisor or other professionals who are required by law to act on behalf of your best interests.

2: Get a basic understanding of what you own. You do not need to be an expert, but you should know how to ask good questions. There are plenty of online resources to educate yourself.

3: Engage yourself in a few good conversations about money. Build a support network of people with whom you can have honest discussions. This list would include your spouse, trusted friends, competent family members and perhaps some of your children.  I would keep this list short.

4: Keep good records. I have written on this topic before. You would be shocked at how many people I meet that have no idea what they own or where it is. Having your accounts in the proper name is essential. There are at least 24 files everyone should keep. Refer to my website for the article on this subject, jgmoormeier.com/articles. The article is titled "For Your Family's Sake Get Your Affairs in Order" - May 2017.

5: Act like a CEO. You are the CEO of your private empire. Put all your advisors in one room at the same time and insist they cooperate. This group would include the experts in taxes, law, insurance, real estate, investments and the like.

6: Don't let yourself be bullied. This is a big one. Often this is where sibling rivalry rears its ugly head. It takes a wise woman to navigate this minefield. If you find yourself in a situation like this, it is OK to say, "thank you for your concern for my welfare, but it is my decision."

There are plenty of things to do. Don't wait for a traumatic event, which forces you to venture into the uncomfortable.

Speak up because you have a voice. You are not alone.

Like most other things, once you get started, it is not that overwhelming.

OK, that's all for now.

 


Jeffrey Moormeier of JG Moormeier Financial is a Mukilteo-based financial advisor affiliated with KMS Financial Services, Inc. an SEC registered investment adviser. His column does not represent the opinions of KMS, nor is it an official prediction or recommendation of any kind. The opinions expressed in this column are generalizations. For advise catered to your specific financial circumstances, contact Jeff directly at jeff@jgmoormeier.com or 425-931-8898.

 

 

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