How working women should plan for a secure financial future
Women should take control of their finances. Here‘s what the empowered women should do when it comes to financial planning.
In today’s world, women are equal to men in most ways. Women have achieved high accolades and are doing very well in modern Indian, sometimes even better than their male counterparts!
However, when it comes to financial planning of their family, most times they take the back seat, leaving the details for the husband to handle. The reason often is that the complexity of products and the mathematics involved in financial planning makes it seem puzzling.
However, women should take control of their finances. Here’s what the empowered women should do when it comes to financial planning.
The two pillars of financial planning is protection planning and investment planning.
The working woman has to undergo work and home pressures. With change in lifestyle, there are health issues that come in the way. To cover against risk a woman needs adequate health and life insurance.
Family health insurance is a must nowadays, as hospitalisation cost is skyrocketing. The minimum coverage for a family size of 4 should be about Rs 5 lakh.
The health insurance companies have designed special policies that cover women-specific diseases like breast cancer, uterus cancer, cervical cancer etc. We recommend a separate critical illness policy to cover the women-specific deceases that come with lesser cost and higher coverage. The cost of Rs 2 Lakh cover for the women in the age of 26-35 is less than Rs 1000 per annum.
If you are a working women, you should also have good life cover. The financial loss in case something untoward happens to you can have its impact on the financial security of your dependants. It is always advisable to have a term plan equal to a minimum of 10 times your annual income and a maximum of 20 times.
The cost of a term plan is cheaper for women compared to men in the same age group. The approximate cost of a coverage of Rs 1 Crore, for 30 years term for a women in the age of 30 should cost them around Rs 13,000 per annum.
The other crucial aspect for financial security is investment planning. This includes saving for your child’s future and retirement planning:
Child Future Planning
Every woman has a dream of providing good education and a happy married life for their children. It is very much possible in the most uncompromising way if you plan it right.
Always remember to factor in inflation when you plan for these goals. For instance, the cost of an engineering degree that is approx. Rs 8 Lakh would become Rs 20 Lakh after 10 years due to inflation. It is highly recommended to start a small systematic investment plan in a well-established diversified mutual fund scheme.
Often a working professional living doesn't think about the future. At some point everyone has to retire either from their professional life or from business. The cost of living and the lifestyle keeps changing from time to time. Having the lifestyle changes, and the improvement in the medical sciences, the life expectancy is increased. Women live longer than men and hence they need to plan their retirement well.
Identify the retirement needs and the cost involved. Leave a room for the inflation as well. Inflation in the past 35 years averaged to 6.7 per cent. Identify the quantum of investment required for your retired life and start investing slowly to meet the required corpus for your retirement.
This women’s day would be the ideal day to start your financial plan if you don’t already have one.
Happy Women’s Day!!!
The writer is Business Head, Financial Planning of Wealthladder Investments