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It's important for a financial strategy to include investments for current and future goals, such as retirement. It's just as important to protect those investments against the potential impact of unexpected life events – such as serious injury, long-term illness and death. Building protection into your financial strategy can help you preserve your lifestyle and emotional well-being.
The growing impact of women's income on the household
As women's role in the workforce evolves, their incomes are becoming more important to their families.
You may not see yourself as being primarily responsible for your family’s financial well-being. But you're probably heavily involved in managing your family’s money – including earning a salary, paying bills and deciding on purchases. With that as a starting point, you can learn more about how to protect your way of life against unexpected events.
It can be as simple as participating in one-on-one meetings with a financial advisor to identify goals and solutions, and then incorporating protection into your budget. It’s never too late to take note of potential risks and do something about them.
If you work outside the home, one of the most valuable assets you provide your family is your ability to earn income. If that ability were derailed by an unexpected accident or extended illness, Social Security or work-sponsored programs may help if you meet their qualifications, which can be strict. But they may not provide sufficient income replacement to maintain your family’s lifestyle. Additionally, your contribution to your family’s income could be completely lost due to premature death.
A solid financial strategy includes solutions to maintain your family’s lifestyle if you were to lose your income for an extended period of time. While it may be an unpleasant subject, taking action now will put you in a greater position of control if you or your family ever need this kind of support.
While the above focuses on your work outside the home, you have another significant effect on your family’s budget: the duties you provide as a mother. In that role, you’re often called on to cook, chauffeur, keep house, tutor and care for young children. You can take measures now to ensure your family could pay for this care if you weren't there to provide it.
Almost 80% of women age 65 today will need some form of long-term care compared to fewer than 60% of men who are 65 today. 4 And today, one year of nursing home care costs more than $70,000.5
Would you prefer to receive this care at home, in an assisted living facility or in a nursing home? Will your family provide your care or would you seek professional services? Will you be able to afford your first choice?
It's important to prepare for long-term care while you’re younger and healthier – and potentially have more flexibility with your expenses. Read Three Reasons Long-term Care Is Important to Women for more information.
While taking steps to prepare for the unexpected may not seem like an exciting gift to your family, it can be one of the most loving gifts you can give. You can work together with your financial advisor to tailor a solution for you.
1 Pew Research, "Breadwinner Moms," May 2013
2 Bureau of Labor Statistics, 2013 Annual Social and Economic Supplements to the Current Population Survey
3 Center for American Progress "FactSheet: The Women's Leadership Gap, Women's Leadership by the Numbers," March 7, 2014
4 D.C. Office on Aging, LTCfacts.org, "Understanding Long-term Care," accessed Sept. 11, 2014
5 Genworth, "Cost of Care Survey," 2014