Guest Column: Life expectancy, family needs affect women's investment plans

Financial considerations

Here are a few special considerations for women in regard to their investments.

Longer life expectancy. People in general are living longer these days, and conventional wisdom says that women tend to outlive men. Data from several studies confirm this. According to Centers for Disease Control statistics from 2003, women outlive men by an average of more than five years. Women in particular often end up facing more years in retirement, and to be prepared, they need to be sure to implement strategies to meet their potential long-term needs.

Flying solo. Statistics also show that women have a very high probability of being on their own at some point in their financial lives, not only as a result of a spouse’s death, but also because of divorce or simply remaining single. Dropping from two incomes to one would obviously require making some adjustments, so it’s important to think about alternatives and options to put in place in preparations of these possibilities.

Work force absence. When caring for children – or even an elderly parent – women tend to spend more time away from work than men. Some surveys have shown that, on average, women spend more than a decade out of the work force. The implications for women with regard to investments are clear: They will have less time than their male counterparts to contribute to their retirement nest eggs.

Forming an effective plan

There are several simple steps women can use to come up with a financial plan that will meet their needs.

For starters, women investors need to look for ways to educate themselves about financial issues. Financial publications and Web sites are loaded with information about investment alternatives. It’s important to remember that not every source is the most reliable, but the bottom line is that there’s an abundance of information out there that can be considered.

That said, women investors may want to seek professional advice. Enlisting a financial consultant to help with investments doesn’t take away the ability of investors to make final decisions, but it does provide them with someone to turn to for guidance during the decision-making process.

One of the most important steps in financial planning is to make a list of financial goals and then develop strategies to meet them. Taking the time to assess current financial needs and realities will help women investors get a clear picture of where they are, and then they can envision where they want to go. Keeping in mind the special circumstances mentioned above, women investors can chart a course of action that will enable them to meet any future challenges.

Timothy M. Reese is managing director-investments with A.G. Edwards, a division of Wachovia Securities LLC in Springfield. Member SIPC. He may be reached at timothy.reese@wachoviasec.com.