What Women Need To Know About Managing Their Money In Their 50s

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Statistics have shown that 8 in 10 women feel uncomfortable talking about money*. And  we believe this silence and perceived taboos around money is what is stopping us from building our financial literacy, which can have big impacts on us later in life.

While there’s a lot of attention (and dialogue) about what younger women can do to boost their earning capacity and increase their savings, there’s less emphasis on how older women can take care of their finances, too.

We want to support women (at every age) to feel empowered and in control of their finances, especially when they’re getting closer to retirement. So, we’ve pulled together a practical guide to help women in their 50s (and beyond) to manage their money.

Ready to learn more? Let’s dive in.

Why it’s important to take care of your money in your 50s

We’re big advocates for taking care of your money at any age. But when it comes to older women in Australia, the stats paint a stark picture that demands action.

You already know that the gender pay gap is growing in Australia, now at 14.2% (meaning women earn on average $261.50 per week less than men). But this gap widens as women get older, too. In fact, the gender pay gap rises to its highest point of 17.7% for women over the age of 55.

We also know that one in three women in Australia retire with no super**.

And most concerningly, women over 55 are the fastest growing population experiencing homelessness in Australia.

There’s a range of factors that have caused this bleak outlook for older women, including:

But we’re not here to send you into a spiral of despair. Instead, we’re sharing these stats to reinforce this importance of taking care of our money, especially later in life.

While many of the factors that lead to the gender pay gap require structural change at a policy and government level, there’s still valuable steps we can take as individuals to improve our financial outlook. And that’s what we’re going to arm you with in this blog.

How women can maximise their money in their 50s

No matter what position you’re currently in, we’ve pulled together a stack of practical steps you can take to help you manage (and maximise) your money in your 50s (and beyond).

Boost your financial literacy 

How confident do you feel about making money decisions? Stats from Fidelity Investment* reveal that women tend to shy away from talking about money because they feel it’s “too personal” or “uncomfortable”.

But defaulting to our male partners on money decisions or avoiding them altogether is putting women (especially women in their 50s) at significant risk. In fact, 60% of women surveyed in the Fidelity study worry about not having enough money to last through retirement.

We know that older women (particularly those of us who are divorced***) face the most uncertain financial future. So, now is the time to boost your financial literacy to build your confidence around everything from savings to super.

So, how can you get a better understanding of your finances? Here’s a few places to start:

  • Acknowledge your money blindspots: what finance topics make you feel uncomfortable? Whether it’s checking your super balance, understanding your insurance policies or deciding where to invest your money, start by figuring out what knowledge gaps you have around your finances.
  • Start talking about money with other women in your life: staying silent means none of us can share our money concerns or lean on each other for support. So, it’s time to tackle the taboo of money head-on. Start small and frame these conversations around your desire to learn more about money. Who knows what wisdom your friends and family might have to share.
  • Do your own research: an easy way to start building financial literacy is to head online and scout out reliable educational content. Money Smart has a range of helpful guides that tackle key finance topics, while free platforms such as Ladies Talk Money offer jargon-free video conversations, blogs and eBooks about everything from super to investing.
  • Chat to a financial adviser: the best way to tackle your personal money concerns is to speak with a financial adviser. They’ll be able to answer your specific questions and offer tailored advice about your best path forward. Come armed with questions and use these sessions to help build your financial literacy.

Pay down any debts

Navigating debt repayments isn’t a burden you want to take into retirement. From mortgage repayments to personal loans, owing money can put pressure on your finances now and into the future.

We know that older women (particularly divorced older women) feel the impacts of divorce for decades after the split. Add debts into the mix, and it’s no wonder that divorced Australians between 55 and 74 have less disposable income and fewer assets than married couples.

The sooner you get on top of debts, the better off you’ll be in the decades to come.

So, figure out exactly what you currently own and get a plan in place to pay down your debts.

Money Smart explains it’s important to prioritise your debt repayments by priority.

At the top of your agenda should be things like:

  • Mortgage payments
  • Council rates and body corporate fees
  • Electricity, water and gas
  • Car repayments

If you’re finding it difficult to navigate your debt repayments, take a look at the National Debt Helpline’s guide to prioritising your debts. They also have a free helpline open weekdays from 9:30 am to 4:30 pm where you can chat through your options with a professional.

Get clear on your retirement savings

Do you know how much money you need to retire?

The latest stats from the Australian Super Fund Association (ASFA) reveal Australians need roughly $545,000 in savings or super as a single (or $640,000 as a couple), along with the age pension, to live comfortably.

So, now is the time to look at how your super balance is tracking against this target. It might be worth exploring options like salary sacrificing (where you pay more of your earnings into your super fund) or even looking at strategies like spouse contribution transfers to boost your balance.

Plus if you don’t have a retirement plan already in place, consider chatting with a financial adviser to figure out how you’ll manage your money when you’re no longer working.

Protect your biggest asset

Last up, now is the time to make sure you’ve got the right level of insurance cover in place to protect yourself now and into the future.

TPD insurance (total permanent disability insurance) is valuable as it can cover you in the event that you’re unable to work due to illness or injury. It acts as a safety net for your loved ones, especially if anyone is financially dependent on you.

The other type of insurance that can be helpful is income protection, which covers part of your lost income if you’re unable to work. Essentially, it’s what will cover the bills while you focus on recovery.

Again, the best way to check you’ve got the right level of cover is to chat to a financial adviser. They’ll be able to recommend the right type of insurance for your individual circumstances.

No matter your age, we consider the sooner you get proactive about taking care of your money, the better off you’ll be in the long run. By taking the time to review your spending habits, savings and super balance, you’ll be able to make changes now to help your future self out. And if you’re navigating difficulties, speak with a financial adviser to create a roadmap to put you on the path towards a brighter financial future.

*Source: Fidelity Investments Money Fit Women Study 2015 (US).

** Source: Senate Inquiry into Women’s Economic Security in Retirement, 2016.

*** Source: Australian Institute of Family Studies: Financial living standards after divorce report, 2000.

Any advice provided is general advice only and does not constitute legal or financial advice. You should consider whether any options referred to are appropriate for you, having considered your personal circumstances and needs, and seek advice if necessary, before taking any action.

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