Midlife Money Makeover: 5 Tips for Women to Thrive Financially
From a personal financial planning perspective, women in mid-life face significant challenges that impact their financial security as they approach retirement. Proactive strategies in areas noted below are crucial for navigating these issues and building a stable financial future. 5 ways how we can address these challenges and improve our financial well-being.
1. Closing the Gender Pay Gap and Maximising Income
The gender pay gap affects lifetime earnings and saving capacity. Women in mid-life may also encounter age discrimination, limiting their access to well-paying jobs.
Action Plan:
Negotiate Salaries: Women should prepare to negotiate pay raises by researching industry salary standards and using performance reviews to support their requests.
Reskill and Upskill: Invest in professional development through courses, certifications, or training programs that can open doors to higher-paying positions.
Explore Part-Time or Contract Work in High-Paying Fields: Transitioning to roles in higher-paying industries, even on a part-time or freelance basis, can boost income without needing a full career change.
2. Managing Caregiving Responsibilities
Caregiving for elderly parents or grandchildren can limit earning potential and reduce savings. Many women in this age group face the dual burden of caring for family members across generations.
Action Plan:
Establish a Care Plan: Share caregiving responsibilities with other family members or hire paid caregivers to distribute the workload more evenly.
Utilise Government Benefits and Tax Credits: Research financial assistance available for caregivers, such as subsidies or tax credits, which can help ease the financial burden.
3. Planning for Health Costs
Health-related expenses increase with age, putting pressure on budgets, especially for those with inadequate insurance coverage.
Action Plan:
Set Up a Dedicated Health Fund: Establish an emergency fund specifically for medical expenses. Even a modest monthly contribution can help build a financial cushion over time.
Review Health Insurance Policies: Ensure that health insurance covers essential treatments and consider upgrading to plans that offer better coverage for anticipated conditions.
Access Preventive Care Services: Take advantage of free or low-cost health screenings, vaccinations, and check-ups, which can help detect issues early and reduce future medical costs.
4. Boosting Retirement Savings
Many women have lower KiwiSaver balances due to career breaks and lower lifetime earnings, resulting in inadequate retirement savings.
Action Plan:
Maximise KiwiSaver Contributions: Take full advantage of employer contributions and make voluntary contributions if possible to increase savings.
Review Investment Strategy: Work with a qualified Financial Planner to align investment choices with risk tolerance and retirement timelines to optimise growth potential.
Seek Financial Guidance: A Financial Planner can provide strategies to close the savings gap and enhance financial security.
5. Securing Housing Stability
Rising housing costs and rental rates pose risks for older women, particularly those renting or with low equity in a home.
Action Plan:
Plan to Pay Off the Mortgage Early: If owning a home, focus on paying down the mortgage to eliminate housing costs in retirement.
Explore Government Housing Assistance: Look into programs that provide rent subsidies or affordable housing options for older adults.
Consider Downsizing or Co-Housing: Moving to a smaller home or shared living arrangement can reduce housing expenses and free up resources for other financial needs.
A proactive approach to financial planning can help women address these key issues. A financial plan takes a comprehensive view of your life and connects all aspects to create a strategy that is personalised to your circumstances.
Talk to us to explore if you are on the right track.