Stephanie Taylor Christensen 2015-11-03 21:30:23
Not knowing enough may mean you lose out on financial— and emotional—security as you move toward retirement. Thrivent member Bev Thomen, a 61-year-old former nurse living in Dallas, Oregon, says her recent retirement still feels a bit like an extended vacation. But not long ago, she felt unsure about when and how she could retire at all. “I had managed my 401(k) independently for years, but...I was floundering,” Thomen says. She’d tried to build financial know-how over the years but says she couldn’t get a clear answer about how to manage the big picture. “It felt like I was being sold a product—not advice for me,” she says. And the jargon seemed daunting: “I am a very good nurse, but I know nothing about financial lingo.” As a result, Thomen kept financial questions—and lack of confidence in her financial decisions—under wraps. According to Fidelity’s “Money FIT Women Study,”1 many women do the same: 92% want to know more about financial planning, but less than half feel confident discussing money with a financial advisor. Only 65% talk to their spouse about investments, and less than 20% talk about money with friends. But staying silent about money can cost women financially and emotionally. They can miss out on ways to work toward financial security, which includes retirement savings and insurance coverage for potential disability and medical care costs. And flailing financially creates stress: Nearly half of women who responded to an Allianz Life survey2 feared they’d run out of money. So how do women gain confidence about their finances? 1) Define why money matters to them. Brian J. Macho, a Thrivent Financial representative who works in Minnesota and Wisconsin, says women often get engaged in financial conversations when they’re able to see the “why” behind money decisions. “Men tend to think about ‘how’ money works, and unfortunately this is what a lot of financial information focuses on,” he says. In his experience working with female clients, Macho senses that women tend to feel more engaged and, in turn, empowered when they see “what” financial strategies will do for their lives. That’s how Thomen had a breakthrough. Her confidence grew after her sister recommended she meet with Oregon-based Thrivent Financial Representative Constance Waisanen. To Thomen’s surprise, the conversation didn’t involve financial lingo or a sales pitch: “[Constance] listened to what I wanted for retirement. Just through casual talking.” They chatted about whether Thomen would have enough money to continue her quilting hobby in retirement and to afford weekend getaways. They discussed how she and her husband, 18 years her senior, would handle future medical costs. Waisanen created a strategy that felt more like an outline for Thomen’s life than just a financial one. Thomen left the meeting with a new attitude about money management—and her role in the process. To develop a similar perspective, Macho encourages women to rank their top five values, from family and faith to philanthropy. Then they should list short- and long-term goals, based on those values. “The financial strategies that come out of your goals will matter to you more because you know what they are for,” says Macho. 2) Start the conversation now. Ruth Hayden, author of Your Money Life: The “Make-It-Work” Workbook, says most women will have a “pivot point” that leads them to take control of their money. Unfortunately, it usually comes after a negative event, like the death of a spouse. In fact, the pivot point that spurred Thomen to meet with Waisanen came, in part, after seeing friends struggle with medical costs after an emergency. Don’t wait for that kind of wake-up call. “Decide that you are going to deal with your money now. Period,” says Hayden. 3) Learn a little of the language. Waisanen points out that no one knows what the markets will do or what their financial futures hold—not even the experts. “You do not need to be that knowledgeable about money to be successful with money,” she says. But if fear of appearing financially clueless holds you back, Hayden recommends learning just seven investing terms: Stock. Bond. Mutual fund. Money market. Liquidity. Diversification/asset allocation. Risk. Research one term a day, and think about them in a context that makes sense. “For example, investing in stock is really buying part of a company. Investing in mutual funds is about ‘safety in numbers,’” says Hayden, referring to the other investors you join in a mutual fund. You still may have questions after researching the terms, but you’ll have the knowledge to ask the right ones when you meet with a Thrivent Financial representative. 4) Find trusted resources. Fidelity’s research shows that more than 60% of women don’t take advantage of financial advice they have access to at work. Their reasons vary, according to Fidelity and Allianz research: Some find it boring, others don’t have time and some think they don’t know enough to approach an advisor. But getting comfortable with finances isn’t about an advisor, a series of meetings or an investment product. It’s about you. “The right investment strategy isn’t about the markets or what the advisor would do. The right strategy focuses on how much longer you want to work, your personality and what you’re comfortable with,” says Waisanen. When you do talk with a financial advisor, Macho says to let go of thoughts about how much you know about money. Just focus on how much power you have when you make your money work for you—not the other way around. Finding financial confidence Research by ING3 (now called Voya) echoes Thomen’s experience of feeling more confident after talking with a trusted financial advisor: 62% of investors who work with an advisor feel confident in their ability to have a secure and enjoyable retirement, compared to just 34% who feel the same without an advisor’s help. Thomen joins the ranks of both men and women who have that kind of confidence. Now enjoying her early retirement, she still worries about money every now and then. But she just calls Waisanen. “After every conversation, I feel so positive about life. She makes me feel like I can do this.” 3 Ways to Feel Money Smart Thrivent’s Constance Waisanen and Brian Macho offer these ideas to help women take control of their money. 1) Get a basic sense of what you make, own and owe. Put your income, debts and cash flow on paper. Track spending for at least two weeks to know where your money goes. 2) Prioritize goals. Your personal values will drive decisions about finances that can affect other areas, like career, family and lifestyle. “Money should serve your life—not vice versa,” Macho says. 3) Find a financial partner. No one has all the answers—don’t put that pressure on yourself when it comes to money. Work with your Thrivent Financial representative to talk through financial strategies. Stephanie Taylor Christensen writes about money for USA Today, Real Simple, ForbesWoman, mint.com, learnvest.com and more. 1 “2015 Fidelity Investments Money FIT Women Study” 2 “The Allianz Women, Money, and Power Study: Empowered and Underserved” 3 ING Institute for Retirement Research (Voya) Thrivent Financial representatives are licensed insurance agents/producers of Thrivent Financial, the marketing name for Thrivent Financial for Lutherans, Appleton, WI. They are also registered representatives of Thrivent Investment Management Inc., 625 Fourth Ave S., Minneapolis, MN 55415.
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