While participating in the forum discussions, I find that a large number of people face financial dangers due to various decisions they take. However, women are more prone to these dangers.
Let's take a look as to why they are more prone to such dangers.
1. Less knowledge about finance: In a recent research, it has been found women are less likely to understand the stock and bond markets and risk diversification than men. As a result, they are unable to invest in stocks and bonds in order to take advantage of the benefits and earn profit.
2. Women earn less than men: It is a fact that women earn about a third less than men. As a result, they make smaller contributions toward Social Security and pensions. Also, they have less cash available to put in their 401(k) accounts.
3. Motherhood and care giving: Many women leave jobs in order to take care of their children or aging parents. As a result, it interrupts their contribution to their Social Security and pension accounts. Thus, they save less for their retirement.
4. Pensions: There are very few women who get pensions. The number is as low as 29%. This is one of the major reasons why women are more prone to financial dangers as they do not have any retirement savings to fall back on.
Here are few tips how women can to get back on track and save themselves from financial dangers:
Educate oneself and make a plan: Women should take out time to learn the basic principles of saving and planning for retirement. This will help them in remaining well informed and take the right decision. They should make a plan that takes into account what they spend now and try to decide on their retirement needs. They can even take professional help in order to do so.
Savings: Women should make it a point to start saving immediately as they get a job. This will help them in building a retirement savings as well as an emergency fund. The savings will help them to be at a better financial situation when they retire.
Focus on retirement benefits: When women consider taking a job, they should carefully look at the retirement benefits that it will offer. Jobs at the chemical and drug companies, energy, utilities, financial services and healthcare offer excellent retirement benefits. Jobs in these fields will help women in the long run.
Gather knowledge about Social Security spousal and survivor benefits: As women tend to earn less, they should try out for spousal benefits. They will be entitled to receive whichever is larger: their own benefit or half of their spouse's. Also, when a spouse dies, the survivor is entitled to receive the greater of her own benefit or 100% of the spouse's benefit.