At Boutique Advisers we are seeing an increasing number of women seeking advice about when they can retire.
Alarmingly, women over 55 are the fastest growing cohort of homeless Australians, increasing by 31% reported by the 2016 Census. Factors that contribute to this figure include a rising divorce rate, lower super balances, part-time employment and lack of knowledge around superannuation and personal finances. So how can women reduce this risk?
Women often seek out a financial advisor later in life when facing retirement, however getting on the right track sooner with finances means laying down sound financial framework to build wealth and arranging assets now to be in an optimum position when it comes time to stop work.
Recent research suggests women will retire with $151,000 below what is considered a “comfortable” retirement, although the magic retirement number will differ with each individual depending on pre-retirement income, desired lifestyle and age of retirement it’s important to understand the amount you need and how to get there.
The Cost of Doing Nothing
Without a financial advisor and a clear financial strategy, many women may be at significant risk in their retirement. Although there is always time to improve your financial position when you have years left to work, at retirement the window on building wealth has closed and the opportunities to contribute to grow your super balance in a tax effective way has ceased. Even when less than 10 years away from retirement, many women can still benefit from financial advice, but the gains increase the earlier you start. Seeking out a financial advisor early will uncover the strategies available to build wealth and give yourself options over when and how you retire when the time comes.
Superannuation Gender Gap
Many factors such as lower wages, part time work or time out of the workforce will all have an impact on how much contributions women are receiving into their superannuation funds. Women therefore have some catching up to do to fill the gap between what they may have and what they may need in retirement. Financial advice can expose the deficit and explore available strategies to get more money invested into super, earning returns and growing to access in retirement.
Gen X Women’s Retirement Lifestyle
Only 17% of Gen x women are confident they will have a comfortable retirement. Not having enough funds means that quality of life will suffer at a time that is meant for relaxation and enjoyment once employment ends. Longevity of available funds will determine the lifestyle Gen X women will have and without careful planning and understanding financial modelling of retirement position, money can run out pretty quickly. This will leave women vulnerable to relying on government support, limit flexibility of choices and ability to pay for required healthcare. Having an in-dept conversation with an adviser about desired lifestyle, age of retirement and longevity of current funds can be developed into financial advice to show clear financial modelling of position in retirement and enable women to make informed financial decisions about their future.
Future Proof Finances
Women who seek financial advice will have access to expert knowledge, personalised guidance and professional support to tailor a personal financial plan to future proof finances. Being exposed to the most effective wealth accumulation strategies, goal setting and investment optimisation provides tangible value and expedites the likelihood of reaching financial goals and ultimately retiring comfortably.
Research by the Financial Advice Association Australia (FAAA) found that participants that sought advice were twice as likely to experience a comfortable retirement than those that didn’t. To get on the right track with your finances and have a financial plan in place to clearly articulate the years ahead, please get in touch to have a complimentary, confidential chat.
Jodi Escudier is a financial advisor who helps women and families identify and reach financial goals through positive strategic advice. Over the last 8 years Jodi has worked together with clients to develop a pathway to a better financial future and secure wealth for themselves both now and as they navigate life’s everchanging demands.