In our two-part series on overcoming financial challenges, we address key issues women face in achieving financial independence.
Understanding Common Financial Regrets
When reflecting on their financial journeys, many women cite regrets such as not investing enough, choosing lower-paying careers, and accumulating excessive debt. These challenges underscore the critical need for financial literacy for women and long-term planning. Women often encounter unique obstacles, including longer life expectancy, career breaks, and persistent wage disparities.
According to Susan Carson of Morson Carson Wealth Counsel, overcoming these hurdles begins with a proactive approach to financial planning for women. Regardless of where you are in your financial journey, Susan and her team can assist with essential decisions—whether you’re investing for the first time, preparing for retirement, or navigating family transitions.
The Unique Perspective Women Have on Money
Women often approach finances differently than men. While men may prioritize competition and portfolio size, women typically view money as a means to achieve security and independence. "Women are practical about their finances," says Susan. “They want to understand how their financial decisions will impact their lives.”
Longer Life Expectancy and Retirement Planning
With women generally living longer than men, planning for a secure retirement is crucial. "Women should prioritize tracking their net worth each year," Susan advises. This practice helps ensure alignment with long-term financial goals. A diversified investment portfolio that balances growth and stability is essential for making savings last throughout an extended retirement.
Managing Career Breaks
Many women take career breaks to care for children or aging parents, which can significantly affect their income and savings over time. "If you're taking time off work, create a strategy to compensate for lost savings when you return to the workforce," Susan suggests. Utilizing tools like RRSPs and TFSAs during your working years can help offset these gaps, while Spousal RRSPs provide additional flexibility for couples facing career interruptions.
Addressing Wage Disparities for Financial Independence
Despite ongoing wage gaps, women can take control of their financial futures by maximizing savings, enhancing investment strategies, and managing debt effectively. By being strategic and prioritizing financial security, women can mitigate the impact of wage disparities over time and enhance their financial independence.
The Importance of Estate Planning and Wealth Transfer
Women often outlive their spouses, making estate planning a vital component of financial management. Susan emphasizes the importance of having up-to-date wills, power of attorney, and other legal arrangements to prevent unnecessary stress in the future. "Being prepared ensures your financial legacy is secure and relieves some of the burden from family members during challenging times," she reflects, drawing from her personal experiences.
Navigating the 'Sandwich Generation'
As discussed in our previous blog, many women today are balancing the demands of caring for both children and elderly parents while managing their careers. "This pressure can lead to financial strain and anxiety," Susan notes. By taking proactive steps and having a solid plan, women can better manage these responsibilities and gain greater control over their financial well-being.
Strategic Timing for Retirement Income
Timing is another critical factor in securing financial stability during retirement, especially regarding accessing Canada Pension Plan (CPP) and Old Age Security (OAS) benefits. "Delaying your collection of CPP and OAS can increase your payments later in life, which is especially advantageous for women who are likely to live longer," Susan advises. This strategy, combined with a diversified portfolio and meticulous financial planning, can ensure a more comfortable retirement.
Take Action for Your Financial Future
By addressing these specific challenges and implementing actionable steps, women can secure their financial futures and build lasting wealth. For tailored advice and wealth management strategies, Morson Carson Wealth Counsel has you covered.