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Getting Your Financial Future back on Track After a Life Change

Updated: Nov 13, 2021

If you are like most, when we're struggling, and the last thing we are thinking about is retirement.

Updated January, 7,2021

Covid-19 has definitely been a wake-up call for many. According to the National Women's Law Center, a policy-focused organization that fights for gender justice, in November 2020 alone, 10,000 women ages 20 and over left the labor force, adding to the more than 2 million women who have left the labor force since February 2020, this means they are neither working nor looking for work as of that date.

80% of women over 64 are already more likely to live an impoverished life than men.

There are no student loans or government bailouts to help us with a shortfall in retirement. According to a report released by the National Institute on Retirement Security on March 1, 2016, 80% of women over 64 are already more likely to live an impoverished life than men. So when we're hit with an income loss due to disability, death of a loved one, an unanticipated divorce or a down market it usually takes us by surprise and creates an opportunity to plan or adjust an existing plan.

Although that report was 4 years ago, add in the ongoing gender wage gap for women (yes there is a wage gap) the explosion of no fault divorces, and a rise in grey divorce (those over 50), and an explosion in the unemployment rate due to the pandemic, I dare say this number has not improved and would not be surprised if the stats have gotten even worse. According to a report by, The Simple Truth About the Gender Wage Gap, "On average, women in America are paid only 82 cents for every dollar paid to men. At the current rate of progress, the pay gap will not close until 2093'.

So what’s a gal or guy to do?

Cut Discretionary Spending

This might sound obvious, but life is not the same. Maybe the markets down and you're in retirement. Or the income that once supported one household may now be supporting two. Or income was cut due to the passing of a loved one. OR OR OR...

You may be entering the workforce again or for the first time; whatever the reason. And yes, as we get older it's harder to find employment, we get discriminated against and yes the wage gap is usually wider. So we have to focus on the things we CAN control.

Things will need to change, and only we can be the catalyst for that change!

For example, renting instead of owning a home may make more sense, even if just in the interim to keep expenses down. We need to remove the emotion from our financial decisions and take a longer range view.

COVID-19 only makes this worse as so many have been laid-off or furloughed. Now the CARES Act does put some remedies in place that you will want to check out.

Take Advantage of Any Employer Retirement Match

(The employer match may be gone) .. and it is NOT an excuse to stop saving towards your retirement. If you can, save even more to make up that lost match.

Many employers offer workplace savings plans that match employee contributions—often up to 6% of your salary. Execute the strategy above so you may contribute enough to your tax-deferred employer plan to earn 100% of the employer match in a 401(k), 401(b) or 457 plan. Earning the match is like receiving a 100% return on your investment. Where can you find a 100% return? This will help your nest egg grow and boost your retirement security. Not contributing enough to utilize the employer match is like leaving free money on the table.

Now with the recent pandemic some employers are reducing or eliminating the match to reduce expenses and be able to pay employees. Now that fine, and it is NOT an excuse to stop saving towards your retirement. So please, think twice before taking a withdrawal from your 401(k). If you can, see where you can cut back, and save even more to make up that lost match.

View Your Debt Like An Investment

Like a what? I know that intuitively does not make sense. But there are competing resources for paying off debt and saving. Start by comparing the interest rate on the debt to that of an expected investment return and the power of compounding of retirement savings.

Look at the interest rates you are paying like market returns that are leaving your pocket..

If, for example, your student loan or mortgage has a before-tax interest rate of 3–5 % (which may be even less after a tax deduction) and you can reasonably earn 5% with compounding over a longer time horizon in retirement, it may make more sense to put money in your retirement account than pay off that debt early—always considering cash flow and remembering that market returns are not certain. 

But if your credit card is charging 10%, put more money there. Once you stop paying that 10% it’s like earning 10%, because it is no longer being spent and is available in your budget for other items. Look at the interest rates you are paying like market returns that are leaving your pocket, and try to consolidate debt into a lower interest rate whenever possible.

Possibly consider speaking with a debt counselor at a not for profit organization. The Federal Trade Commission (FTC) has resources to help assist you in this research.

Get in Touch With Where You Are in Your Story

When we are not blaming and we are choosing, it can be very empowering!

What is going on for you right now, in this moment? Are you living in the past with regret, bringing the past into the present, or maybe even living in the future with fear? 

What messages have you taken in and believe about yourself?

- "I'm not good with money"

- "I can't so this"

- "I never have enough"

- "Things can't get better"

This can be scary. For me, being grateful for what I have, acknowledging a point of view or a set of expectations I have of a situation, or others that are coloring my perspective, is freeing. Once done, I can choose to see things differently and I can choose to take actions so that I may be the architect of my life.

When we are not blaming and we are choosing, it can be very empowering!

Yes, these are the basics. We need to lay the foundation before we can move onto planning strategies. You may also want to consult a certified financial planner for comprehensive advice on strategies that address your retirement planning needs.

Michelle, CFP, CDFA also works with individuals and couples as a financial neutral in Divorce. See www.BeingMindfulinDivorce,com

The information, tools and material presented by the Author are provided to you for informational purposes only and are not intended to be and should not be used or considered as an offer, recommendation or a solicitation to sell or an offer, recommendation or solicitation to buy or subscribe to any financial instruments, investment management services or advisory services. The Author does not intend to provide investment, tax or legal advice. 

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