Starting over financially can be a daunting task, especially when you’re at the age of 50. But with determination, resilience, and the right strategies, it is possible to overcome the challenges and embark on a new, financially stable chapter of your life. In this article, author and aging mentor Brenda Ackerman explores how to navigate the complexities of new beginnings and overcome financial hurdles in midlife exploring strategies to help us secure a bright future.
At 49 years of age, I found myself perched on life’s metaphorical ‘hill,’ with the ‘Big 5-0’ looming just ahead. This crossroads not only signalled to me that I was figuratively ‘over the hill,’ but it also came with a notable shift in my perspective, priorities, and financial focus. As I started walking down the slope, I found myself navigating not just the downward path that aging brings but was also complicated by a divorce that reshaped my financial future.
This journey isn’t mine alone; it’s one shared by countless midlife women. Divorce, just one of the many twists our life paths can take, prompted me to dive much deeper into my financial landscape than I ever had before. Choices made now would ripple into the future, not only impacting me but also those I care about.
Whether you’re starting over due to unforeseen circumstances or simply seeking a fresh start, this article will provide you with actionable tips and insights that can help you achieve financial independence and security in midlife for it’s never too late to take control of your money and create the life you deserve.
The importance of rewriting your financial narrative
While over the past several decades, we have seen women experience a seismic shift by seeing dramatic gains in personal and financial power, there is still a long trail left to blaze. Although women live longer lives than men, they also have less wealth to fund their journey.
It’s clear that women are facing unique financial challenges, from the pay gap to the wealth gap. However, these challenges also highlight the importance of women’s financial empowerment. By taking control of our financial destinies, we can rewrite the narrative and build a future that’s financially secure and fulfilling.
Think of the song “R-E-S-P-E-C-T” by Aretha Franklin, doesn’t that song empower you and remind you of your strength and resilience? Well, let’s use that same feeling of determination to chart our financial future. By embracing financial wellness, we’re not just securing it; we’re also fostering the life we’ve always envisioned.
Financial Challenges For Women: A Statistical Wake-Up Call
The landscape of life expectancy is changing, and we’re living longer than previous generations. Statistically speaking, we’re likely to surpass our parents’ age milestones. Women specifically are living longer than ever before. By age 85, women outnumber men 2:1 and 81% of centenarians are women.
These eye-opening statistics provide a clear picture of the challenges that many mid-life women encounter in their financial odysseys. They highlight the stark reality of gender-based financial disparities that can have far-reaching consequences as we navigate the intricacies of this phase of life.
Understanding these statistics isn’t just about recognizing the inequalities; it’s about empowering ourselves with the knowledge to overcome them. By addressing these disparities head-on, we can work towards a future that ensures stability and financial freedom for women over 50 and generations to come.
However, it’s essential to acknowledge that women often face unique challenges in their financial lives. According to a report by the National Institute on Retirement Security, (NIRS) women are 80% more likely than men to be impoverished at age 65 and older.
Several underlying factors contribute to this disparity:
- Women, on average, earn less than men throughout their careers due to the gender pay gap. This wage gap has a cumulative effect, resulting in lower lifetime earnings for women. When entering retirement, lower income levels make it challenging for women to maintain the same standard of living.
- Women are more likely to experience career interruptions due to caregiving responsibilities for children, elderly parents, or other family members. These interruptions can lead to fewer years of full-time work and reduced contributions to retirement savings.
- Women typically have a longer life expectancy than men. While this is positive in many ways, it also means that women need to fund a longer retirement period. Longer life spans require more savings to cover expenses, including healthcare and basic needs.
- Defined benefit pension plans, which provide a stable income during retirement, often factor in years of service and earnings. Women’s interrupted careers and lower wages can lead to lower pension benefits compared to men.
- Some women work in sectors or jobs that do not offer retirement plans or pensions. This lack of access to employer-sponsored retirement plans can hinder their ability to save for retirement.
- Women generally have higher healthcare costs in retirement due to longer life expectancies and specific healthcare needs. These increased costs can strain retirement savings.
- Women who are widowed or divorced may face financial challenges, as they are more likely to live alone and manage expenses without a partner’s income.
- In some countries, women may receive reduced Social Security benefits if they have lower lifetime earnings or if they claim benefits early.
All these factors contribute to women’s higher likelihood of facing financial challenges and poverty in their retirement years. Addressing this issue requires a multifaceted approach, including efforts to close the gender pay gap, improve access to retirement savings options, and promote financial empowerment for women at all stages of their lives.
The above data from NIRS paints a grim picture for women, so ladies, we must boss up and focus on what we can do to help ourselves starting with a solid finance education.
Unlocking your financial freedom through knowledge
According to Forbes, financial wellness is not just about money. Financial health means you can reach your goals, take advantage of opportunities and gives you flexibility to pursue your dreams and the only way to achieve financial health is through financial literacy (fundamental life skills that should be taught in the school curriculum).
But the good news, is you can do something about your financial future right now, no matter your age!
To unlock your power through knowledge, it’s crucial to dive into essential financial concepts like budgeting, investing, debt management, and retirement planning.
By taking online courses, reading books, and following reputable financial experts you’ll have access to some fantastic and readily available resources, and I encourage you to access them; do not short-change yourself here. Make it a priority. Try not to get overwhelmed if you are just starting.
Just take small steps to learn what you need to. Even these small steps can lead to significant changes over time and build your financial confidence.
You must also educate yourself in all matters relating to your wealth, insurance, debts, investments, and possessions. This means whether you have two cents or a bazillion dollars, be it in real estate, cash, bank accounts, foreign exchange currencies, stocks, bonds, cryptocurrency, safety deposit boxes, property or vehicle ownership, art, jewellery, your Pokémon card collection, intellectual property, or any financial wealth.
Once you are armed with some, then it’s time to transition from the classroom of education to the proactive stance of staying informed and directly involved in your financial journey.
Don’t delegate: Take control of your finances
Be personally and directly involved in all matters of individual and jointly held monetary resources. If assets are jointly owned and managed electronically, ensure you know the passcodes and log in regularly. Ensure you have a copy of all the paperwork for these resources and a set of keys to any lockboxes, safes, and safety deposit boxes. Know where the coffee can filled with cash is buried in your backyard.
And please, understand that you must be personally involved in this critical area of your life. Do not surrender this power to others. I cannot emphasize enough the importance of this. Don’t be complacent; take control of your finances.
A Certified Financial Planner (CFP) will tell you these things, and so will well-written books on personal finance. So unless you are a bona fide financial guru who manages your finances expertly with a winning track record, I highly suggest you connect with someone who is. Do this independently or jointly with your significant other ASAP if you haven’t already done so. And if it’s been years since you’ve had a financial wellness checkup, schedule another one. I’m serious.
To get a good CFP, look around and get someone with impeccable references, high reviews online and no scam alerts, a successful history, and a deep customer base. Find one you trust and whom you connect with, someone who is aligned with and supportive of your life goals—and not just their commission rate.
Build a financial plan and commit to it as soon as possible in your life. Your future self will thank you. You are worth it!
Put your financial affairs in order before it’s too late
Facing the reality of our demise becomes more relevant and top-of-mind as we enter our mid-life years.
To prepare for the inevitability, I suggest you and your partner have up-to-date wills and powers of attorney for both financial and medical purposes.
I also want to share with you another critical tool that you can build right now – your own Little Black Book! Sounds intriguing, doesn’t it?
In the olden days, a Little Black Book (LBB) was a private listing of some of our most favoured acquaintances that we could call upon for a guaranteed good time. Of course, our cell phones can now serve up any good time imaginable, so perhaps the LBB has gone out of fashion.
However, I have another use for an LBB that I will share with you.
My LBB is a three-ring binder full of relevant and required information that my children will need to get my funeral wishes conducted and my estate underway.
I built my LBB after my divorce; I return to it occasionally to ensure the information is still relevant and up to date for my children in the event of my death.
- Will and powers of attorney (for financial and medical decisions)
- Copies (or originals) of all relevant personal identification documents (birth certificate, Social Insurance Number, passport, health card, driver’s license, etc.)
- Copies of all my financial information—financial institutions, account numbers, credit cards, stock portfolio, RSP portfolio, points cards, redemptions, etc.
- Location of deeds, property tax roll information, utility information
- My funeral wishes, information for any prepaid burial plot or services, and insurance information
- Data for the distribution of my personal effects, not covered by my will
- Lawyer, contact information for my family, and my Certified Financial Planner
- Personal letters to my family
I won’t minimize for you the amount of time that this took to pull together, but I also won’t underestimate the value of this book—for my children, not just myself.
Preparing for the inevitable might seem daunting, but it’s an essential step towards peace of mind and ensuring that your wishes are respected. And be sure to tell them where to find it upon your death.
Your LBB becomes a guiding light, ensuring that even in your absence, your intentions are honoured. It’s a legacy of love and thoughtfulness, granting your family the gift of clarity during a time of emotional turbulence. By taking the time to compile these details, you’re providing your loved ones with the tools they need to navigate this challenging period with grace and respect.
Securing Your Financial Freedom In Midlife And Beyond
The path to financial wellness isn’t always easy, but it’s undoubtedly worth it. Empower yourself with financial knowledge, seek expert advice when needed, and create a legacy of preparedness through your Little Black Book. By taking charge of your financial journey today, you’re ensuring a brighter, more secure future for yourself and your loved ones.
Remember that your financial destiny is in your hands. Let this moment be your call to action to stride forward with confidence into the horizon of financial freedom in midlife and beyond.
Brenda Ackermann is the author of “Aging Sucks But You’re Gonna Love It! A Woman’s Survival Guide to Getting Older” out now https://www.amazon.com/Aging-Sucks-Youre-Gonna-Love/dp/1738804933