Understanding Your Financial Needs

Women have made great strides in entering the business world, whether it’s into a new business venture or as a corporate leader. Women, however, still make less money than men and are more likely to leave the workforce to care for their children or aging parents, sometimes performing double duty by caring for both children and older relatives at the same time. If women earn less money and lose personal income as well as the opportunity to contribute to employer-sponsored retirement plans while out of the workforce, it is more critical for them to understand their unique financial needs, whatever their life stage.

According to 2008 U.S. Census reports, women will live longer than men – on average five to seven years longer – and so experts suggest that they will need to set aside 20 percent more than men for their retirement plans.  Since women make, on average, 80 percent of what a man does in the same job¹, accordingly they face a more daunting task of saving for retirement.

Women’s financial needs are different. Identifying this is the first step toward financial independence. If women understand their current and future needs, and why they should have different concerns than men, they are much more likely to make financial decisions that will help them achieve their goals. 

To get started, a woman should identify her financial goals. She should ask herself:

• How much money do I need to save for short-time goals – emergency funds, a new car, etc.? How should that money be invested?
• How much do I need to save for long term goals – college for kids, retirement?
• How much should I save each year? What kinds of investments will help me reach my goals, and what is the potential risk and return of these investments?
• How often should I review my investments? When should I make changes?
• Do I need a retirement plan separate from my spouse?
• Do I have a will and an estate plan? Is it up-to-date?
• Do I have provisions for the financial and physical care of my dependents – children and aging relatives – in the event something should happen to me or my partner?
• Am I interested in charitable giving?

Answering these questions is the first step in helping a woman to decide where she wants to be financially – now, five years from now and in retirement. Like men, women should place their goals in short, medium and long term categories. Then, work with a financial professional to develop a financial strategy that addresses all of these questions and provides a roadmap that will help you find your way whether you are just starting out, building your family or planning retirement.

For more information, visit the AXA Equitable Online Learning Center

Useful Resources & Links:

• Women And Retirement Savings 
• Women’s Institute for Financial Education 
• Understanding Women's Financial Needs & Behavior 

1) U.S. Bureau of Labor, 2009

*U.S Census Bureau, 2008

** U.S. Bureau of Labor, Highlights of Women’s Earnings in 2008, 2009

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