Three ways for women to future-proof their finances

Amelia Morgenrood

Nine out of ten women will at some point be solely responsible for their own financial wellbeing. As women also tend to outlive men, even those who are wives will at some point be widows and sadly, many marriages end in divorce in any case.

This international research by Mzore international studies also indicates that less than 15% of women in a committed relationship feel responsible for their own retirement planning, with 75% becoming widowed at an average age of 56 and one in four left broke within two months of being widowed.

“Locally, many women have similar experiences. So how can we better future proof our finances?” asks Amelia Morgenrood, Wealth Manager: securities at PSG Wealth Faerie Glen.

“Saving for your future should be as important as nurturing your present. We are caretakers by nature, with many of us juggling family life and work responsibilities. It is very important, however, to put ourselves first – at the very least when it comes to safeguarding our own financial future. You never know what is ahead and cannot afford to rely on your partner or children, or the state to keep you solvent in your golden years.”

Now is the time to think long-term and be brave
Women are generally more conservative in their investment approach, not wanting to take on a lot of risk but the wonderful thing about saving for your future is that you have time to do it. Taking a long-term approach means you don’t have to be entirely cautious. “And the more time you have to save, the more your savings can compound – which effectively means interest being earned on interest your saving contributions have made.” A simple example is R1000 saved per month at an average return of 10% per year; after 10 years’ you will have R204 844; 20 years R759 368; and 30 years R2 260 487. “The only thing you can’t afford is to lose valuable time that could help to grow your savings,” Morgenrood adds.

Read, learn or ask
There are many concepts to understand in investing and many products to choose from. The way the Rand is going to go is unpredictable and your view on how things are favouring in the country will also impact how you choose to invest. If you’re unsure, or don’t even know where to start, consult an independent financial adviser who is skilled in the areas you might not be. “Advisers are there for that exact purpose – to advise you when you aren’t so sure where to put your money and will be able to work alongside you to find a suitable investment that supports your investment approach and goals.” When it comes to retirement saving, using a product like a retirement annuity (RA), for example, comes with investment parameters you will need to adhere to, but can also be the ticket to a comfortable retirement because of its many benefits. “Whether you choose an RA or a different investment product to save towards your future, make sure you are getting the right exposure you need to grow your investment – again, a financial adviser can steer you correctly if you are unsure,” she says.

Look more to yourself while you grow
Women tend to be pillars of strength at home or in the office. Morgenrood says women are often responsible for buying the food at home, but yet not for paying off the home loan. “While you might be nourishing your family, this is a depreciative way of nourishing your future as buying food doesn’t often result in a financial return.” It is vital to be investing part of your income into your own financial plan as well, considering assets that can grow. “By investing for your future – you are actually acting selflessly, as your children or others won’t need to help or support you financially down the line. What a great gift to your loved ones, and most importantly, what a great gift to yourself. With August being women’s month – why not take the step and invest in you,” Morgenrood adds.

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