As we discussed in part 1 of this series, according to The Shriver Report, women are the female breadwinners in nearly half of American families, and are primary or co-breadwinners in ⅔. A fact that can add tremendously to already over-stressed working moms.
Let’s jump right in with more tips from Carla Dearing, founding CEO of SUM180.
- Identify gaps in her retirement game plan. She should work with her advisor or take advantage of the retirement calculator tools available online to estimate what her needs will be in retirement and assess how well her current assets will support her when the time comes. (A simple rule of thumb is that she will need to cover about 80% of her pre-retirement living expenses once she retires.) Knowing what the gaps are will help her address them more effectively.
- Right size her house and mortgage. In general, real estate holdings should comprise 25-40% of her total assets, offering diversification relative to her financial assets and, ideally, a measure of inflation protection. But just because she can have that much property, does not mean she necessarily has to, so she should assess what she needs and wants, and adjust as appropriate. It is always a good idea to ensure that mortgages are not more than 80% of the value of the properties and all second mortgages are paid off. She can re-leverage her property again during retirement if she needs additional income.
- Make sure she has enough insurance. Safeguarding her financial health for the long-term means expecting the unexpected. She should review her home, health, life and auto insurance policies to make sure she has enough coverage to protect her savings and her family in case of a medical or legal emergency.
- Lean into her savings goals. It’s never too late to save and, chances are, she’s at or near the peak of her earning power. She should create and implement an accelerated savings plan to fatten her nest egg and pay off lingering debts.
- Explore long-term care options. Medicare and private health insurance programs don’t pay for all of the long-term care services most people eventually need. Long-term care insurance for parents, a partner and herself, if it can be obtained, is one way to preserve assets against the costs of long-term nursing home care. It must be bought while she is healthy so it is worth exploring now. She will be paying the premiums for a longer period of time, but will have less risk of being denied coverage due to an illness that appears in her later years.
As more women embrace the role of breadwinner for their families, they must also embrace and hold onto the fact that they have extraordinary power and are often times the best man for the job.