A good plan for old age
WOMEN continue to treat financial matters lightly, a trend economists believe contributes to many women's state of poverty in old age.
Tendani Mantshimuli, a consumer economist at Liberty, says failure to get their finances in order spells trouble for women.
Urging them to adopt a hands-on approach to finances, she warns that a continuation of this trend perpetuates a cycle of poverty that most women find themselves in during their retirement years.
Mantshimuli says research by Accenture revealed that women were the biggest money spenders.
"Research showed that women bought 51percent of all new cars in the US and 85percent of all consumer goods," she says.
But a lack of planning and understanding key financial indicators was worrying, she says.
"Inflation and Consumer Price Index are the two most common terms to understand. Inflation is one of the most important economic indicators that tell us the general level of prices in the economy and how prices are changing.
"For example, when inflation is high, prices rise very quickly and when it's low, prices stay steady and rise slowly over time.
"This is an important measurement because when prices increase, your income will allow you to buy fewer goods and services than before. This might also affect your investment capacity," Mantshimuli says.
She says because women live longer than men, it becomes imperative to have a good financial plan to ensure a good standard of living at retirement.
"You need about 15 times your annual salary at retirement for 80 percent of salary adjusted for inflation to maintain the same standard of living at retirement.
"Because women live longer, the multiple is higher than for men. But the playing fields are far from level when it comes to retirement savings for women and men.
"Women need to think carefully about their retirement plans. There are a number of unique situations applicable to women, which cannot be ignored when providing an efficient solution," she says, sighting starting a family as one of the factors to be considered.
"Often, when a woman starts a family, she might leave formal employment to be a full-time mom or work part time.
"How many of these women transfer their pension or provident fund benefits into a preservation fund or retirement annuity to create a nest egg?" Mantshimuli asks.
She says additional savings are needed to compensate for the time spent out of work.
Mantshimuli encourages women to have a financial plan that is independent of their partners.
"Generally, women live about seven years longer than men and are falling short of retirement goals," Mantshimuli says.
Curvacious
Ya neh, its so true. I nid 2 get a gud financial advisor. Saving 4 retirement is sooo NB. Let's start saving ladies!!!!Report Abuse