PHOTOGRAPH: Vichaya Kiatying-Angsulee, 123rf.com

Do you fear becoming a bag lady as you enter your golden years? According to wealth advisor to women Consuelo Mack, over 50% of women fear not being able to support themselves as they enter retirement. Most wealthy Hong Kongers fear running out of money even though they have the highest savings rate among 15 countries surveyed by HSBC/Ipsos MORI. The Taiwanese and Singaporeans are second and third for average savings.

What’s more, women face what could be called the triple witching of retirement savings – longevity risk, lower salaries, and fewer years in the workforce. Planning and discipline can alleviate these fears. If you are still procrastinating on your retirement savings, it is time to buckle down and focus on your investment plan.

 

#1 Finance Tips for Women in Their 30s & 40s: Retirement Savings

It is not only women on modest incomes who fear not having enough money for retirement. Many affluent women do not have enough money in their retirement savings plans to maintain a comfortable life in retirement. While as a woman you may have less income than men, the good news is women have higher investment returns on average. The best thing to happen to women is the do-it-yourself investment trend. By applying a more conservative investment strategy and discipline, women are on their way to a more comfortable retirement.

Many Asian women pay into mandatory retirement accounts through work, but this savings alone is not going to be enough to fund retirement.  To find out your shortfall, plug your financial situation into a retirement savings calculator. In step two, most women need to cut expenses and save more.

 

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Develop a budget and identify places where you can become a spend thrift. Choose one of the many smart asset allocation tools online or offered by your broker to determine the best mix of stocks, bonds, alternative investments and cash for your risk profile.

 

#2 Finance Tips for Women in Their 30s & 40s: Life Insurance

If you have dependents, life insurance can ensure their financial needs are taken care of if you die. The two main types of life insurance are term and whole life policies. A term life insurance policy allows you to set the duration of the policy. You may decide to end the policy when your children complete college. This would ensure that their college is paid for if you were to die while they are still students.

A whole life policy is in effect until you die. Because a payout will be made at some point, the fees are higher for life insurance. A whole life policy can be used as collateral against a loan. If you were to die, the insurance payout would first pay for any loans secured by the policy, and then the beneficiaries would be paid. Like retirement planning, the first step is to do a needs assessment based on the age of your dependents and how long they will require support for.

Once you have determined how much money your family will need if you were to die, you can choose the correct policy terms.

 

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#3 Finance Tips for Women in Their 30s & 40s: Health Insurance

Asian women have different health care needs today. While much healthier on average than their western counterparts, Asian women are at a higher risk of cancer and other lifestyle diseases. Even the healthiest among us should have critical illness insurance coverage in addition to our mandatory government coverage. Ensure you have disability and medical emergency coverage. Some countries do not provide mandatory coverage until 40 years of age or later, so you will also need more thorough coverage for the intervening years.

Many insurers have a special woman’s health insurance plan. Be sure to know exactly what illnesses and ‘female cancers’ are covered. If you have a history of cervical cancer in your family, you want to ensure your policy has you covered. Start by reviewing women’s health insurance needs.

 

#4 Finance Tips for Women in Their 30s & 40s: Estate Planning

Estate planning is the area the most often overlooked in financial planning, and at the heart of nasty family battles. The family office is an important innovation in private wealth management.  Families now cooperate on investing, estate planning and philanthropic giving through these investment management vehicles. When it is time for estate planning, most major financial decisions have already been agreed to.

 

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Asian family offices have unique needs beyond the western model, according to the Association of Family Offices in Asia. While the family office was developed by ultra-affluent families, all families can benefit from applying the model and cooperating on family investment, insurance and estate planning considerations. The first step is to make a will to ensure your assets are passed on without interference to your children and other dependents. Consult a professional to ensure you understand inheritance and tax laws, and any faith laws that may apply to you.

Women are very busy taking care of the day-to-day needs of their family. Carving out some time each week to focus on financial planning can provide you with more free time in the future to spend with your family.

 

This article was originally published in The New Savvy.

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