Women are controlling more of their individual wealth these days. However, there are still a few situations that many women do not think about, often derailing their financial future. I myself at one point decided to take the path of being a stay-at-home mom. I felt not only lucky but proud to raise my children as they grew up, having the opportunity to create the best possible home for them. The dilemma however, is that oftentimes we perceive our wealth and money in the present with no clear strategy or expectations about its future. We can get lost in the “happily ever after” story, assuming all will work out for the best without understanding the consequences of not properly planning.
In my case, as well as for many women out there who decide to take similar paths, I faced hidden financial hurdles resulting from divorce. Alternatively, there are circumstances aside from divorce that have the potential to cause financial curveballs; especially apparent in the following circumstances:
The research shows many people end up relying on social security benefits for the bulk of their retirement needs. That situation is most common among elderly single women. Just because you are not working or work in a part-time position that does not provide you with a workplace retirement plan does not mean you should ignore your retirement and savings planning. If your spouse is the only one earning income, the IRS allows for a spousal IRA which allows you to put up to $5,500 (as of 2018) a year away in your name and still get a tax deduction even though you did not earn any income yourself. You can also open up an individual investment or savings account in your name alone and budget an amount every month. Even if there is no tax advantage, you should plan for the future.
1 – Bajtelsmit and VanDerhei, 1996; Hinz, McCarthy, and Turner, 1996
2 - https://www.cbpp.org/research/social-security/social-security-keeps-22-million-americans-out-of-poverty-a-state-by-state