Conversations to have with your financial advisor: a female perspective

Everyone is unique, but there are a few considerations that women should have when looking at their financial big picture

As a successful woman, you've worked tirelessly to grow your wealth. The only thing that may be missing is the confidence to discuss and plan what you'll do with that wealth in the future. When you're unsure of whom to turn to, remember that a trusted financial advisor can be a valuable resource for making empowered decisions with your money.

Having worked with many women, I've observed a few recurring themes that women need to account for when making long-term financial plans. Here are a few different types of conversations I've had with my clients that you may consider having with your advisor.

Making savings last

Statistically, women live longer lives. According to Statista, while the average life expectancy for a US woman born in 2019 is 81 years, for men, the average age is closer to 76 years. From a practical perspective, that longer life expectancy needs to be planned for.

Consider an example of two people who retire at the age of 65. Both want to spend $70,000 in retirement and they have estimated a 5% return on their savings. If a man lives until age 76, he'll need to have saved roughly $580,000 by the time he retires. If a woman lives until age 81, she will need to save almost $180,000 more to cover those additional years.

In addition to making sure general living expenses in retirement will be covered, health care costs are also a big consideration. It's important to work with an advisor who can help you estimate the cost of health care, possible long-term care needs and how to pay for it. When you turn 65 you're eligible for Medicare, but many people assume it's free and will cover everything. They don't realize that there are premiums to pay, out of pocket costs to cover, and things that just aren't covered at all by Medicare without supplemental coverage. A thorough financial plan will factor in all of the additional health care costs you'll need to cover.

The caretaking of you and others

Another topic that I've discussed with clients is the impact of caring for others and making plans for the caretaking of themselves. Caregiving has a major impact on women and their money. Women are often tasked with caregiving for children, spouses and/or aging parents. Women are also more likely than men to take a break from the professional workplace to care for family. These changes affect income as well as savings and Social Security benefits.

One consideration that clients frequently overlook is planning for who will take care of them in old age. If you have children, can your children care for you? They may be able, but are they willing? It's critically important that you discuss with them how you wish to be cared for. A financial advisor can help you establish a plan, organize your financial affairs and make recommendations that will help lessen a lot of anxiety and stress later on.

How to maximize benefits

Deductions are important to tax filings — and much has changed with the 2017 Tax Cuts and Job Act (TCJA). Charitable donation deductions have long been favored as a way to lower taxable income, but the TCJA upped the standard deduction and raised the bar for itemized deductions. Various charities reported a decrease in donations in 2018. A financial advisor can help you navigate strategies so that you can continue donating to your favorite charities while also lowering your taxable income. One popular solution with many clients is to bunch up numerous deductions in one year. Using a donor-advised fund allows you to itemize a large lump sum donation in one year but gives you the flexibility to make distributions to charities over time.

Holistic planning

Financial planning is more than just managing stocks and bonds for retirement. Numerous factors can determine what your financial picture might look like — tax laws, estate laws, as well as opportunities and risks outside of investments. A financial advisor should be able to help ensure every aspect of your financial life is cared for — from having an estate plan to making sure you have the appropriate level of insurance coverage.

Working with an advisor can help to keep you on track, similar to working with a personal trainer. It may feel like a lot of work right now, but the results later make it worthwhile. Every individual's situation is unique and complex and a CERTIFIED FINANCIAL PLANNER™ professional can dig deep into those issues with you.

The views expressed in the article are those of the author and/or person interviewed and do not necessarily reflect the views of Silicon Valley Bank, a division of First-Citizens Bank and First Citizens BancShares, Inc. The materials on this website are for informational purposes only, are subject to change and do not take into account your particular investment objective, financial situation or need. Since each client’s situation is unique, you should consult your financial advisor and/or tax planning professional before acting on any information provided herein.