Financial Strategies for Women – Women’s History Month

This month, we are focusing on the financial planning aspect of ATLAS with our Lifestyle Planning Group (ATLAS LPG.)  As March is also Women’s History Month, we take this opportunity to highlight some important information for- and about- women in the financial planning realm.

More and more women are providing for their families, however there is still some discrepancy between women and men when it comes to preparing for retirement.  It is not for lack of education, as we know that, today, women are more likely to attend college than men. (3)  So what’s going on?

One theory, is a lack of confidence. Though it has been shown that nearly 60% of women take sole responsibility of their investment decisions;  studies have shown that only about 19% of women feel confident in their ability to fully retire with a comfortable lifestyle. (1,2)  With another study finding that less than half of women (48%) feel confident about their finances.

Women may be hesitating to ask questions, get clarifications, or dive deeper into the conversation of investing and retirement planning, in an effort to not appear naïve or uneducated in, what has historically been, a male-dominated field. (4)  The jargon of personal finance can be intimidating for anyone – you may know what a 401(k) is, but how about a 403(b)? (5)

Women may want to consider their options and seek the counsel of a financial professional, if desired, who can assist in a comprehensive conversation about goals and ambitions.  And when speaking with a financial professional, it is important not to be afraid to ask for clarification if something is unfamiliar.  We all had to start somewhere – it’s never too late to begin your retirement education, understanding, and preparation.

One way to get started with smart investing, is to pin-point individual topics of which you can gain a deeper understanding.  This allows for bite-sized intake of financial planning information, to accumulate a greater knowledge over time.  One such topic is “compound interest.”

Compound interest is best looked at over a long period of time, as it allows you to gain interest on your interest, year after year.  While the growth may appear to have a slow start, compound interest creates an exponential return on your savings, causing funds to grow faster than they would in an account with principal-only interest.  For example – If you put $500 in an account with 5% interest, you will have $525 at the end of the first year.  With compound interest, your second year will not only see interest on your principal (the original $500), but also interest on your interest (the additional $25 you earned in year one.)  Therefore, at the end of your second year, you will have $551.25 – that breaks down to $500 principal, $25 in interest from year one, $25 in interest from year two, and $1.25 of interest on year one’s $25 in interest.  Time is key with compound interest, meaning the sooner you start, the better.  That being said, it is also never too late to begin!

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This blog is intended for general informational purposes, and should not be taken as strategy or advice by ATLAS Lifestyle Planning Group (ATLAS LPG).  ATLAS LPG encourages all individuals to consult their financial professional about these or other matters which concern their personal finances or financial strategy.  If you do not have a financial advisor, or feel you may benefit from seeking the advice of a different financial advisor, please do not hesitate to reach out directly to your ATLAS office, or contact us HERE.  Your ATLAS LPG Team is always ready and happy to help, whatever your needs may be!

 Investment advisory services offered through ATLAS Lifestyle Planning Group (ATLAS LPG), a Registered Investment Advisor.  ATLAS LPG will only provide investment advisory services in jurisdictions where it is registered as an investment adviser or exempt from registration.  Insurance and annuities offered through ATLAS Risk Management Group (ATLAS RMG) CA License # 0M41231.  ATLAS LPG and ATLAS RMG are separate entities and neither provides legal or tax advice.

Citations:
(1)  AssociatedBank.com, May 18, 2023
(2)  TransAmericaCenter.org, 2023
(3)  Statista.com, 2023
(4)  Bankrate.com, April 10, 2023
(5)  Distributions from 401(k), 403(b), and most other employer-sponsored retirement plans are taxed as ordinary income, and if taken before age 59-1/2, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you much begin taking required minimum distributions.

* Some of the information found in this article may have been provided by FMG or Assetmark Inc.