I’m approaching 40 and suddenly thoughts about making money and my retirement, are starting to bug me for attention.
While the 40-something or even 50-something woman is likely to have another 20 years of work ahead of her before retirement, the simple truth is that middle age has arrived and most mornings are starting with a stretch – ahhhh!
It would be nice to ignore this a little but as I start work on the next quarterly Women’s Index, I’m very much aware of how important it is for women over 40 to start planning for their financial future thanks to reading and writing about some progressive and alarming facts.
Here’s what we know about women over 40 years.
- Women aged 45-64 years are doing between 1-12% less unpaid work – that is housework and caring for children/loved ones – than they were in 2002. But interestingly men in this age group are doing 9-17% more unpaid work.
- Women 55 years and over are doing more full-time work than ever with employment numbers up 22% to 524,000 since June 2015.
- The superannuation gender gap for women over 55 years fell from 34% to 26% this year. That’s been affected by more women using top up strategies to boost their super, and as we’ve just discussed, more older women in the workforce.
Sadly a quarter of Australian women have no superannuation at all and many of them are older women.
- Single elderly Australian women are at high risk of being homeless and living in poverty. I know too many women in this age group who are couch surfing, or who are too afraid to leave broken relationships because they are not financially secure.
After digesting this information, I decided to put together a list of some of the top things that women over 40 could be doing to be better at managing their money and investing, as well as plan for their retirement.
Here’s 10 key tips to consider for 40 and 50-something women.
- Keep your skills relevant. Keep educating yourself through formal and informal education. There are many free or low cost online courses available today if you want them, plus networking has never been easier thanks to social media.
- Keep saving. A little here and there is better than nothing and can make a nice addition to your retirement savings over a 20-30 year period.
- Side hustles… Do you have one? Is there more you can be doing to increase your income? Is there a purposeful venture you’d like to dabble in?
- What is your retirement plan… is it taking your super and paying out a mortgage or will you be relying on the pension or a mix of both? This is the time to have a plan and if you don’t have one, make one.
- Boost your super. Consider making additional contributions – before and or after tax. There are a various ways you can do this, and even some helpful apps such as the Longevity App which are making this a bit easier.
- Re-check insurances – you may not need as much if kids are becoming independent.
- Make sure that if you have children, that you at least have income protection insurance.
- Direct any cost savings (eg. School fees, mortgage) to other investments such as your super, mortgage repayments, investments.
- Prioritise your spending! Be smarter with your money and think about how you can save. For example library books over buying books, coffee machines and making lunches over always buying on the go.
- Do your math on your earnings and the aged pension and find the “sweet spot.” For example it may be possible to work less and earn a reduced annual wage like $30,000 and still be eligible for the aged pension.
This Financy article is a rewrite of one we provided to Yahoo Finance and it has been republished here with exclusive permission.