Women outlive men by nearly a decade – will your wealth last?

– Paul Damant, CFP (Director, Cornerstone Asset Management and Managing Director, Cornerstone Financial Services Group of Companies)

As a species, our life expectancy has increased exponentially over the last century alone. In 1900 the global average life expectancy was 31, in 1950 it increased to 48 and by 2014 it was 71. We keep getting older and older, and each generation is expected to live about a decade longer that their predecessors – in particular the female population, whose longevity is reigning supreme.

A recent study by the Government Employees Medical Scheme (GEMS) has revealed that women outlive men by nearly a decade. Although this pattern of longevity is highly dependent on social, medical and economic factors, it is clear that the average woman will outlive the average man – which means that most woman will have to be financially independant for much longer.

Cornerstone Asset Management takes pride in the bespoke and individualised approach it takes when investing and managing clients’ wealth. If you are a woman, having an appropriate investment strategy is paramount to maximizing growth on your investments to ensure that you achieve your stated investment objectives.  Here are some factors to consider when deciding on an approach to managing your wealth.

Women have more family related responsibilities and expenses

WealthManagement.com indicates that among the many unique factors that affect women’s financial wellness, family responsibly has a spot in the top five  Whether you are married, divorced, partnered or single, a mother or not, there is a good chance that your will have more financial responsibilities than your male peers. If you have children, you will likely spend a larger portion of your disposable income on them, either in the form of perishable goods, current and future education or entertainment. Furthermore, women are more likely to have parents or other family members who are financially dependent on them.

It’s important to take note of all of these factors, because they can minimise the amount you can comfortably save each month to invest and build your wealth. Think about setting up a savings fund for your children’s future education as soon as possible (even before they are born) to benefit from compound interest and maximise growth. Likewise, by having an additional emergency savings fund in place from a young age, you will be able to assist family in need without having to touch your long-term savings.

Get in touch with Cornerstone Financial Planning for more advice on budgeting, reaching your financial goals and savings for your family’s future.

Woman earn less than men

Although salary inequality between men and women is being firmly addressed by many corporate companies and government institutions, it is still a massive problem worldwide. In South Africa, the average woman is earning 27% less than average man according to a recent report by Fin24.  Due to women’s income being much smaller than their male counterparts, the portion they can put into savings and investments each month will also be limited.

This means that not only do women have to save more because they’ll likely live longer, they also need to save smarter and start sooner, as their monthly contributions might be less. Perhaps consider a more aggressive approach to investing when you are younger as it may yield higher returns and increase your capital. Bear in mind that an aggressive investment approach holds more risk.

Furthermore, men are traditionally seen as the main breadwinner and source of income within family structures. This often leads to a very strong reliance on their salaries and savings and can sometimes lead to women saving and investing less. By empowering and educating yourself on the effective and well planned management of your own wealth, you will be able to secure a more stable, comfortable and independent future.

Having to plan for a longer life

If you are going to live longer, you will be retired for longer which will require your post retirement income to be calculated and managed accordingly. As much as starting to save earlier and smarter is vital to building up a comfortable retirement fund, your post retirement wealth management is just as important.

If you are close to retirement or already retired, now is the time to get in touch with an expert wealth manager and investment advisor to ensure that your hard-earned savings keep on working for you, even after you have retired. Across the board, this is usually done by careful managing your investments, reviewing changes frequently and adjusting where needed. However, having to plan for an additional ten years will definitely require a more specialised and bespoke approach.

Post-retirement wealth management is a highly specialised area of financial services and therefore having a qualified and committed wealth manager at your side should be non-negotiable. If you need advice or guidance regarding your wealth management or retirement savings, contact Cornerstone Asset Management today and find out how we can help to grow your wealth even more so that you can spend those extra ten years in style – after all, you’ve earned it.

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