Canadian women today are busier than ever, often juggling a career, family and community activities. The Covid pandemic and its impact on the economy (including the latest bout of inflation) have really highlighted the importance for women to educate themselves on financial matters in order to safeguard themselves and their families.
With that in mind, here are some tips and insights to help women take control of their financial future in order to build wealth, overcome financial challenges and achieve their retirement goals.
According to a Financial Independence survey of 1,000 Canadian women:1
- 56% do not have a written financial
(60% of those aged 45 to 54 don’t have a plan)
When life is so hectic, finding the time to create a financial plan can be challenging. But a financial plan is like a roadmap for the future, designed to help you set realistic financial goals and outline a strategy and timeline for reaching them. These goals may include buying a home or new car, saving for a child’s education, or ensuring your wealth is preserved for future generations.
A financial plan that puts saving and investing at the forefront can go a long way in helping you meet life’s challenges, financial or otherwise.
A financial plan doesn’t only give you financial benefits. It can also empower you to have greater confidence when it comes to your money and future. A major study of Canadians found that those who take part in comprehensive financial planning report higher levels of emotional well-being than those who have engaged in limited planning.2
Our knowledgeable Scotiabank advisors – in conjunction with financial planning tools and products, and access to resources and specialists across the bank – can help you create a financial plan that’s right for you.
Canadian women are living longer, with a life expectancy of 85 years on average versus 81 years for men.3
With more years spent in retirement, women may need to fund a retirement that could last 20 years or more. Having a sound investment plan will help you avoid the risk of a savings shortfall in retirement so you can maintain your desired lifestyle. The risk of outliving your savings, also known as longevity risk, is one of the main concerns facing retirees.
Because women are living longer, they’re more likely to need long-term care. You may require specialized medical care that can come at an additional cost if your employer doesn’t offer lifelong health insurance, which many employers, particularly in the private sector, no longer do. Out-of-pocket expenses for long-term care services, prescriptions and treatment can quickly deplete retirement savings, making it imperative to plan for unforeseen health care issues. It’s important to understand the medical coverage that’s available and whether it will meet your needs. It may be beneficial to set aside funds to pay for private health insurance to fill the gaps not covered by provincial coverage.
The downside of letting actual or perceived market risk impact long-term planning is very real. An overly conservative approach to investing will help to lower the overall risk of your portfolio, but could increase the risk of falling short of your retirement goals or running out of money (i.e., longevity risk).
Consider finding a middle ground with an investment solution that offers a balanced approach to risk and return. Diversifying your portfolio to include a balance of conservative and growth-oriented investments has the potential to boost the value of your portfolio over the long run and combat longevity risk. The key to long-term investment success is finding a balanced mix of investments that will let you remain at ease.
Talk to your Scotiabank advisor. They can help determine your unique risk tolerance and then build a portfolio that’s suited to your investment style.
Did you know?
Canadians’ top 3 retirement concerns:4
68% Not having enough money to support retirement
66% Retirement savings have been negatively impacted by the rising cost of living
63% Underestimating how much money is needed in retirement
Studies show that women often reduce or stop saving for retirement due to childcare or eldercare responsibilities. While it’s important to be there for your family, it’s equally important to commit to investing in your future.
If you haven’t already done so, setting up Pre-Authorized Contributions (PACs) is an easy and convenient way to start building up savings for your financial goals – be it an emergency fund, a new car, child’s education or retirement. You can choose how much money you want to save, how often, as well as which accounts or investments you’re contributing to.
To see how quickly your savings can add up by investing regularly with PACs, visit scotiabank.com/PAC and try out our interactive video. Visit your nearest Scotiabank branch and an advisor will be happy to set up a PAC that meets your needs.
Learn about a wide range of financial topics to help you make informed decisions
Visit the ScotiaAdvice+ Centre at scotiabank.com/adviceplus, where you’ll find timely financial information, advice, tips and tools. We’re constantly adding new content, so make sure you check back frequently.
If you have any questions, reach out to a Scotiabank advisor or visit scotiabank.com/book to schedule an appointment.
Women account for almost 2/3 of caregivers spending 20 or more hours per week on caregiving tasks
(64% women versus 36% men)5
Tending to the family is a defining part of life for many women. That includes being the primary caregiver to elderly parents.
Taking on caregiver responsibilities can be especially stressful for women in the “sandwich generation” as most still have careers to grow, children to raise, and financial obligations to meet, in addition to providing care for aging parents.
While it may be challenging to put your goals first while caring for your parents, planning is critical so you don’t lose sight of your goals and the care you may need in the future. When your needs are taken care of, you will be more effective helping others. Take the time to plan for sufficient funds in retirement and build contingencies in your financial plan, not only for the care you may need when you get older, but also to provide care to someone else.
If you don’t already have a financial plan in place, a Scotiabank advisor can help you create a plan that will include strategies to help you address the possibility of taking on a caregiver role to elderly parents.
Research has shown that households working with a financial advisor accumulate more assets than those that don’t – and the longer they work with an advisor, the more their savings will grow.6
Versus non-advised households, the average household with a financial advisor accumulated:
- 1.8 times more financial assets over 4 to 6 years
- 2.1 times more assets over 7 to 14 years
- 2.3 times more assets over periods greater than 15 years
With many women time-crunched and focused on other priorities besides their finances, a financial advisor can provide the help needed to create a financial plan unique to their situation. With the vital role a financial advisor plays in helping you achieve your financial goals, it’s important to choose the right advisor – one that you trust and feel comfortable with. As in any relationship, open and honest communication is key. By taking this approach, your advisor can provide you with the knowledge, support and motivation that can help you reach your financial goals with confidence.
When working with a financial advisor, you’ll have the opportunity to increase your financial knowledge and learn about better savings approaches, which in turn will enable you make more informed choices.
Source: Scotiabank, Consumer Sentiment Towards Retirement, 2022 Investment Poll, July 2022.
These are some of the findings of a Maru Public Opinion Poll conducted from the 21st of to 26th of July 2022 among 1,517 randomly selected Canadian adults who are primary/shared decision makers for household savings and investments and who are members of Maru/Blue‘s Maru Voice Canada online panel. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of ±3%, 19 times out of 20. The results have been weighted by education, age, gender, and region to match the population, according to Census data.