Single Women and Money: The Basics Are Even More Important

Money Basics for Single Women Empyrion Wealth

By now, most of us know the basics of success in personal finance: save more, spend less; max out your 401(k) and contribute to an IRA; build up an emergency fund; buy long-term care and disability insurance… the list goes on. But for single women, including women in transition and especially those who have never been married, those basic principles are even more crucial. No one else is building a safety net for you, so you have to do it for yourself. But too many single women aren’t doing it.

In decades past, women traditionally left the financial decisions to the men. Even unmarried women often put their dependence on a father, a brother, or some other male figure. This resulted in many women being completely unprepared when life forced them to face circumstances on their own. Even today, it’s still not uncommon to find women with a low confidence level when it comes to their finances. A study by online lender Laurel Road, published in March 2018, found that 64% of millennial women described themselves as stressed about their finances, compared with only 47% of men. Further, 88% of millennial males who were not finance majors reported taking at least one personal finance course during college, compared with only 54% of women.

These are particularly troubling statistics for single women because, on average, they will live much longer in retirement than their male counterparts of the same age. For example, a 25-year-old woman can expect to need $158,300 more than a man in order to fund the same retirement lifestyle for her expected life expectancy. For this reason, one of my priorities with my clients who are women in transition, especially as they approach retirement, is to have them take maximum advantage of the IRS catchup provision that allows persons 50 and older to make increased contributions to 401(k)s, IRAs, and other qualified retirement plans. This is one of those basics that is so crucial for single women who want to enjoy a secure, satisfying retirement.

In fact, I think all women would do well to “think single” as they consider their finances. Even those who are happily married are statistically likely to be single someday. Their needs are different than their husbands’, and the sooner they start to tailor their financial strategies and planning to that reality, the better. The best safety net is the one you build and control, so it’s important to have the right tools and the right understanding in order to make it work for you. If we can help you get started, please get in touch.

Stay Diversified, Stay Your Course!