As women continue to push through gender constraints within the workplace, many are breaking through the glass ceiling to reach powerful positions within companies — and often with a salary to match.
While, admittedly, an income gap problem remains to be solved, this doesn’t change the fact that women are now significant contributors to household incomes. In fact, over half of women in the U.S. are primary breadwinners for their families, and 30% of them are married and contribute more than half of joint earnings.
These shifts have come as a result of other changes in society including higher divorce rates, marriage delays, and increased levels of education.
According to the National Center for Education Statistics, 56% of college students are women. The U.S. Census Bureau Educational Attainment data for 2018 also shows that 53% and 56% of bachelor’s and master’s degrees were earned by women, respectively.
Women have more opportunities in the workplace than at any other time in history. But, their financial responsibilities have grown along with their increased participation.
Having a plan in place can protect and ensure that breadwinning women continue to support themselves and their families no matter what comes their way.
Ahead are three concerns every breadwinning woman needs to think about when creating their financial strategy:
1. Retiring Later
The latest CDC report states the average life expectancy in the U.S. is 76.1 years for men and 81.1 years for women. Also, as many as 70% of women will require assisted medical care at some point after the age of 75.
For breadwinners in the family, these statistics may mean that many women will choose to or need to work later than traditional retirement ages.
For some, social security benefits and retirement funds won’t be enough to cover expenses and sky-high healthcare costs. This is true even with they’re eligible for Medicare, as cheaper or better health insurances may be available through employers.
While most of us can’t ever imagine wanting to work more than one extra day than we need to, there are benefits to working longer, including more years contributing to retirement accounts and fewer years of retirement withdrawals. Because of compound interest, setting aside extra money for as little as five more years in a Roth IRA can guarantee retirement funds don’t run out when women need them most.
And the truth is many seniors thrive when working in retirement. They find it’s the perfect way to stay engaged and physically active.
What’s more, women don’t have to be doing the same old job. It can be the beginning of a radical new career that puts their passions and job satisfaction front and center.
There are other things to think about when creating a retirement plan. For example, an over-reliance on working during old age can be detrimental when health declines or an aging spouse needs care.
For a portion of women, the answer might be to save more today in case they can’t tomorrow. Others might choose to take out additional insurance policies now, such as long-term care, when premiums are more affordable.
Married breadwinners may need a game plan for how to face pressures to retire early from spouses who’ve already reached retirement age.
Deciding beforehand how to handle these situations can protect against rash decisions and ensure that the proper preparation can be put into place so desired lifestyles are maintained in retirement.
2. Life Events
Both expected and unexpected life events can take a toll on finances. The difference with the expected is there’s time to prepare. Things like maternity leave, home upgrades, and Black Friday spending can all be saved for ahead of time.
But what about when layoffs, divorces, illnesses, surgeries, and temporary or permanent disabilities happen? What do you do then?
Living paycheck to paycheck can make even the smallest unforeseen expense seem overwhelming. When the family breadwinner is unable to work, the panic alone might make them feel like their world is folding in. However, creating a financial plan today can ensure we get through the fiercest storms tomorrow.
A crucial part of a financial strategy should be an emergency savings account. This is a fund designed to cover the most basic expenses like groceries, rents and mortgages, utilities, and health insurance when surprise bills mean you can’t.
Many unexpected expenses are at most a couple of hundred dollars. Having just $1,000 saved may prevent the need to go into debt by taking out a personal loan or racking up charges on credit cards.
The ultimate goal, however, should be to save three to six months’ worth of essential expenses and possibly more if you are the only earner in your household.
Instead of making impulse decisions or being forced to take on a J.O.B., this money will give you enough cash reserves to reconsider the circumstances, make necessary preparations, and shift gears with ease as you ride through a crisis.
3. Caring for More Than Children
While women have made incredible personal and financial strides in the last century, many traditional roles and responsibilities are still expected of women but not men.
Women who work just as many (or more) hours than men continue to feel external and internal pressures to keep a clean home, put dinner on the table, and make sure children are taken care of.
And when it comes to aging parents and grandparents, the expectation persists that women will be the caregivers.
The National Alliance for Caregiving and AARP report that 66% of caregivers are female. Females also are more likely to make alternate work arrangements and to give up over $300,000 in caregiving costs, missed wages, and lost social security benefits.
Discussing with your family beforehand how these situations will be tackled prevents the burden from resting squarely on your shoulders.
Personal and financial expectations can be laid out decades ahead of time, so it’s not assumed that one person will be responsible for all aspects of parenting or caregiving.
With a plan in place, you can take the proper steps to ensure you’re prepared for the future.
Women who contribute to the majority of the household income have additional pressures and challenges to consider. By creating a plan to deal with these potential hardships ahead of time, you can reduce stress and worry. Also, crafting a financial road map guarantees women can maintain their financial independence and lifestyles, regardless of what life has in store for them.
About The Author
Lorraine Roberte is Founder and CEO of Crafty Writing. She is a freelance writer for hire specializing in creating articles for businesses and startups in the personal finance and digital marketing niches. She uses her expert knowledge, skills, and experience to draft content that gets attention on social media and visibility on search engines.