According to a recent study conducted by Northwestern Mutual, women belonging to the Gen X age group are significantly less confident about their finances than men in the same age group. Gen X includes people born between 1960 and 1980, which means they are now between the ages of 43 and 58 and are soon approaching retirement age. The study reported that Gen X women were the least likely to have a long-term financial plan and the most likely to feel they would not have enough funds for retirement. Additionally, more than 60% of women in this particular age group felt that they would not be financially ready to retire at the typical retirement age.
Feeling financially insecure can have a negative impact on many areas of your life, including your physical and mental health. Therefore, it is important to take steps to gain knowledge and confidence. Here are some ways to start:
- Create a Net Worth Statement. Make a list of all your assets and liabilities (debts).
- Assess your current annual cash flow. List all of your sources of income and estimate your total annual expenses. Subtract the expenses from the income, and that is your net cash flow (hopefully a positive number!).
- Identify your savings. List any auto-savings programs such as company 401-k plans. Be sure to include company matching amounts.
- Run a retirement plan calculation. There are many resources on the Internet that can help with this. You can search for free retirement planning calculators or use The Fidelity Retirement Score, a quick and easy tool.
- Develop your success game plan. If you’re feeling worried or stressed about your finances, it’s important to take action. Start by figuring out what you can do to get back on track. For instance, you could increase your retirement plan contributions or upgrade your job by pursuing further education. You could ask your employer for a raise or consider switching jobs altogether. The key is to understand where you stand financially and to identify the steps you need to take to improve your situation. By doing so, you’ll be able to regain control and feel more confident about your future.
If all of this feels a bit overwhelming, consider hiring a professional to help you navigate this journey. You can find a Certified Financial Planning professional near you at CFP.net. Consider looking specifically for one that is ‘fee-only,’ meaning they don’t sell products. Remember, knowledge is power, and that power can help you build your confidence.
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Stewart H. Welch, III, CFP®, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books, including 50 Rules of Success; J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaire; and 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. For more information, visit The Welch Group. Consult your financial advisor before acting on comments in this article.
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