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Financial Advisor Shares Financial Advice for Women Through Every Decade of Her Career

  • It’s important that women have a financial plan in place to ensure financial security later in life.
  • Over time, be prepared to increase your savings rate and make paying off student loans a priority.
  • Women should negotiate their first salary because this is the start of the salary history for their career.

As women are moving up in their careers, starting businesses, investing and making more money, their financial goals and needs are constantly changing.

Insider recently spoke to Ernest Burley, CFP, who has been in the financial planning industry for over 25 years and his book Money Management: From Grade School to Grade School has been used to teach people principles of financial planning and money management. Burley works with women investors, teaching them how to structure their investments so that they have financial security later in life.

“Women as they are making more money are investing and saving more, but their financial needs change as they move through life and there are steps that they can take to prepare for financial security down the road,” Burley said to Insider on this theme.

Here are some of the biggest financial moves a woman can make in her life, decade-by-decade, according to Burley.

Women in their 20s

Typically, when one is just getting started in their career, they need to make sure that they are negotiating for a competitive salary and benefits that include healthcare, retirement, and parental leave.

Negotiating the salary for your first job is particularly important because this is effectively the beginning of a salary history for the rest of one’s career.

“Not negotiating your salary from the beginning will cost you thousands over the life of your career and that is money that you could have invested,” Burley says.

Not negotiating your salary also contributes to the gender pay gap and that gap can cost a woman nearly $1 million over the course of her career, according to The Institute for Women’s Policy Research.

Although it may seem early, everyone should start investing for retirement in their 20s. This means that new hires or women just starting in their career should start fully investing in their company’s 401(k) and also open a Roth IRA.

According to Burley, not only should women in their 20s be thinking about retirement, it’s also an important moment to get equally serious about paying down student loans. If you have student loans, get on a repayment plan and be determined to pay them off.

“In your 20s, you might think that it’s just normal to have student loans, but this is when you should really put as much as you can towards student loan repayment,” Burley says of the theme. “If you don’t have a mortgage or children, this is when you can really pay those loans down before life gets in the way.”

Women in their 30s

Once one gets into their 30s, they are likely well into their career and should be consistently saving and investing. However, one thing people may not be thinking about is long-term care insurance.

Long-term care insurance helps cover the costs of care associated with a chronic medical condition or a serious accident.

“Get long-term care insurance now because it will be cheaper than if you try to get it later,” Burley says.

If you have a major accident or serious illness, long-term care insurance covers expenses associated with care such as a home health nurse, adult day care and services to assist with daily living.

“Most people start thinking about this coverage when they are in their 50s, but it will cost so much more then because there is more of a likelihood at that time that you will need to use it.”

You may also want to think about starting a business. It is always smart to have multiple streams of income and starting a business or side hustle is a great way to generate more income and also utilize skills that may not be engaged at work.

“I tell all of my clients to build a side hustle. By the time you are in your thirties, you know what your skills and assets are and can start a business that will bring in more money for you to save and invest and also insulate you from job loss or market volatility,” says Burley.

Women in their 40s

This is when your savings and investing for retirement should be in overdrive. Professionals now are typically at their highest earning potential as they are well established in their careers and expenses are routine.

“All saving and investing should be on auto-pilot and you should have your retirement plan set. Make sure that you are using tax-qualified plans and it would be great to be using the 401(k), Roth IRA combo if you can ,” Burley states.

In addition to your finances, take stock of your skills, assets and career achievements. Are you where you want to be in your career? Should you be asking for a raise? Should you leave your job and strike out on your own? Should you increase your skill set by taking a class or getting a certification?

“This is important because you want to be making the most money that you can in your career at this point, because it affects how much money you have to save and pay expenses,” explains Burley. “Take a look at your student loan situation if you have them and get aggressive about paying them off.”

Even though student loan debt may be viewed as “good debt” the payment is still due every month and with the interest, the principal can grow to where it can get out of hand.

“Many women get sidetracked on paying their student loans in their 30s and 40s because they are getting married and having kids, but we are learning more and more that people in their 60s and 70s are still repaying student loan debt, you really want to be aggressive about paying off this debt, you don’t want to be dealing with this in retirement,” Burley adds.

Women In their 50s

Once you reach your 50s, this is when your financial plan should be coming together. In addition to retirement accounts, you should be building a cash reserve.

“Build a two-year cash reserve if you can, I advise that during a time when the market is down like it is now, it’s better to pull from your cash account instead of investing accounts,” says Burley. “You can build back cash reserves after the market is doing better, but if you sell investments when the market is down, you lose money.”

To make sure that you are on track for retirement, sit down with your financial advisor when applicable and discuss financial goals, review your investments and check your time horizon for retirement.

“This is the deep check-in where you get a more realistic picture and time frame of the funds you will have for retirement and if there is any course correction that is needed, now is the time to do it,” Burley says.

Women in their 60s

Make sure that all your health and life insurance needs are covered and you want to check and ensure that you are being more conservative with your investing.

“At this stage, it’s important that all of your health care, power of attorney and life insurance documents and policies are in place, and make sure that you have life insurance that is not tied to your job so that this coverage is in place whether you work there or not,” Burley says.

It’s also wise to have permanent life insurance. Permanent life insurance means that the premium and the benefit remain the same for life and coverage never expires.

“Permanent life insurance is different from term life insurance and I really advise talking to a licensed insurance professional about what your needs are, because as you get older, you don’t want any premiums increasing during this time,” Burley stated.

“As you move through your career and life, the most important thing to do is to continue to review your financial decisions as your goals ebb and flow. It’s important to stay consistent, reduce unnecessary expenses and save more. A successful financial plan will not crystallize overnight, but each step will bring you closer to financial security.”

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