This year on International Women’s Day, we are pressing for progress to close the gap
As I reflect on International Women’s Day, I know that we are all too aware of the challenge surrounding women and their financial security in retirement; women are retiring with lower super balances on average compared with men1, but they are living longer, all of which is compounded by the gender pay gap and career breaks. Baby boomer women face additional challenges because they haven’t been able to benefit from superannuation guarantee contributions over the course of their careers given it was only introduced in 1992, and they now have less time to build their super balances because they are either close to or in retirement.
Contributing to super is important but it does need to be balanced with managing your day-to-day needs. I have provided four things you can start doing today to help you engage with your finances to overcome some of these challenges, and in doing so, press for progress with your broader community, whether it be colleagues, sisters, friends, wives, daughters, girlfriends or nieces.
Focus on one thing first
Like all learning, it takes time. Start with a focus on one thing first. Think about what you don’t know, what keeps you awake at night or what you want to improve. Do you want to check whether your super is invested appropriately? Or understand what to do with a lump sum? Or work through the intricacies of your SMSF? Take it step by step. First is writing down what you want to learn about. If that seems overwhelming, break it down into smaller steps. We have found that you can gain confidence even if you are acting on one small step at a time.
Review the investments in your superannuation fund
Research shows that women are more conservative investors than men2, but this can be detrimental in the long term because if we invest too conservatively we miss out on compound earnings. Higher growth investments do have the potential for higher earnings which can help your money last in retirement, but these investments do carry more risk. So, it’s important to get the balance right for your personal preferences A good investment adviser will work with you to understand what you are comfortable with and can also help you find investments which may help you to balance out these ups and downs.
See a professional for a holistic plan
Putting together a plan with a professional wealth management adviser can help lift your chances of meeting your short and long-term financial goals. However, what women tell us is that they want an adviser who will take the time to listen to them, to understand their personal goals and tailor strategies and investments for what they want. Women don’t want a cookie-cutter approach. If you feel like your adviser isn’t listening to you or is trying to fit you into a bucket, shop around and find somebody who will listen to you. There are great client-focused advisers and teaming up with the right person who can provide a holistic approach to your personal finances can help you get your money working harder. You can find out more about Dixon Advisory’s private wealth management team and their approach at one of our complimentary seminars.
Take advantage of your communities
In 2015, Dixon Advisory created the Wise program for SMSF Trustees. This program was designed to support Baby Boomer women to engage with their financial future in a learning environment that suits them; a small, informal group setting where everybody feels comfortable to ask their own questions. In my experience leading these groups, the most common initial response from our women Trustees is a feeling of relief from knowing that they aren’t alone, that there are other women who are working through the same decisions as them. The women also love hearing questions from other women because it provides insight on a topic or a different way of thinking about things. What all of this says to me is that when women are provided with collaborative and open learning environments, where they can ask their own questions and hear ideas from people in similar situations to their own, they thrive. So, I really encourage you to start talking about money and finances within your own community. It doesn’t matter if you don’t know what questions to ask, they will come once you start the conversation. You may be surprised at what your community can share with you, and you may even find an area of interest you never knew existed.
To find out more about the Wise program and how Dixon Advisory helps our SMSF Trustee clients with these steps, please visit our website. If you aren’t sure where to start, why don’t you share this article with somebody to initiate that first conversation, the outcome might pleasantly surprise you!
This insight may contain general financial advice and was prepared without taking into account your objectives, financial situation or needs. Before acting on any advice, you should consider whether the advice is appropriate to you. Seeking professional personal advice is always highly recommended. Any forward-looking statements are based on current expectations at the time of writing. No assurance can be given that such expectations will prove to be correct.