Over 50s women face some unique challenges with money, we look at how you can help them get back-to-basics and support a side-hustle.
Low incomes and insufficient superannuation savings are just two things that many women in their 50s know a lot about, and this means they’re often put in the too-hard basket when it comes to financial advice. But some advisers who specialise in working with this demographic say what’s needed is a different approach to the stock-standard financial advice, and that starts with three simple ideas.
“If women are hanging with people who are saying, look you’re 55 and it’s never going to happen for you, then it’s going to hurt their self-belief and the actions they take,” says Tracey Sofra partner and financial planner at Sofcorp Financial Services.
“We need to help women over 50 find their confidence in their ability, the right company, and actually overcome any hurdles in their mind that prevents them from moving forward.”
For many women over 50, the prospect of an early retirement is unlikely because their financial situation just doesn’t allow for it. Labour force trends indicate that women and men in their 50s are staying in the workforce longer than previous generations, due to rising living costs, and having a low or single income.
From my own observations, where I’ve seen some women in their 50s go backwards financially and struggle, is where a lack of financial education and access to quality advice, has led to desperate measures being taken.
I’ve interviewed many women who have resorted to early access of their superannuation on financial hardship grounds, only to pay off credit card debt, and spend it on rental accommodation. The long-term impact of this can be devastating financially and emotionally, especially if there is no plan in place for the future.
This is where getting back to basics and thinking outside the box on income generation, yes with tax considerations in mind, are important.
“Cash flow is the thing that everyone relies on, so you need to do an analysis of what is coming in and going out for your client’s bank accounts,” says Ms Sofra.
“At the age of 50, it’s important to have control over your super and that involves knowing where it is, what the balance is and going through the latest statement to see what other costs such as insurances are there and if they’re appropriate.
“From that point, and depending on cash flow, it might be possible to allocate a minimum of 20 per cent to 30 per cent of income to invest elsewhere.
“The downside of doing this at age 50 is the shorter timeframe, and the compound factor won’t be working as much in superannuation or savings. But don’t be deterred, you may just have to look at what other options are available.”
Marion Mays wealth mentor at Thalia Stanley Group says where financial advisers can also help is by providing professional guidance to help women monetise their skill sets or expertise beyond their existing income streams from a job.
“Women of this age group could be mentored by financial planners to develop their side hustle, finding their unique skill sets beyond their paid job and monetising this.
Common side-hustles might involve using Airbnb when the family home has rooms that could be rented out, as well as providing tutoring in a specialised area like music or maths, or part-time work like personal admin.
“We live in a society where everyone needs help and if we dig deep enough, most of us have a skill set that someone wants, needs and is willing to pay for as a service.
Whatever the side hustle, it’s imperative for women of this age group to be mentored, reminded of their value and encouraged to start thinking outside the square to increase earnings that can be invested over the remaining years to top up their super balances.
Bianca Hartge-Hazelman writes on women’s money matters and is the publisher of Financy.com.au and The Women’s Index.
The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.
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