Lack of financial literacy concerns older women


By Elizabeth Somerville

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A lack of knowledge and communication in relation to their personal financial situation is creating concern among women approaching retirement, a personal wealth management specialist has said.

“I believe that over half of all self-funded women retiring have not really been involved in financial decisions and as a result don’t have the full picture of how their superannuation or other investments work,” HLB Mann Judd partner and head of wealth management Michael Hutton said.

“This is causing unnecessary stress about how they will handle their investments and income if their partner dies before them – which is a statistical probability.

“It also makes them extremely vulnerable to receiving the wrong advice and even tracking down where all the assets are may be very difficult.”

That was of primary concern for women in relationships within the baby boomer category or past generations where men traditionally looked after a couple’s finances, Hutton said.

He suggested that to involve both partners in financial decision-making and increase understanding, couples should follow the “4D approach” to discuss, decide, disclose and devolve their financial situation.

“Communication is essential, so even though one of the spouses might find it boring, couples should discuss their financial situation regularly, including what the options are and why decisions were made,” he said.

“If both partners are involved in making financial decisions, then inevitably understanding is improved and probably better decisions are made.”

Women should take an active interest in their financial situation and participate in financial decision-making alongside their partners, he said.

“Husbands also have a responsibility to make sure their partners know how the financial arrangements work and where the assets are,” he said.

He suggested couples should make a list of what assets existed, how they worked and how they were linked in order to share financial responsibility and ensure both partners’ involvement.

“Both partners should be able to action accounts, starting from the simple matter of paying bills and checking statements,” he said.

“Involvement of both partners will immediately help improve understanding and increase the comfort level of both.”

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