Personal financial planning for a long time appeared an area of mystery and complexity normally associated with bankers or men in suits.
The Internet has removed a lot of the mysticism now allowing women and men to buy financial services directly from various Internet sites at substantial savings.
The Internet and smartphones now enable women who understand the financial services industry to buy shares and funds online and also get quotes for various other financial products.
Financial planning for women whose work or family take them away from their home country however needs more thought and attention and in particular with regard to the following areas.
It is often easy to forget this area and assume that if anything happens while abroad that the country where you are living will provide for all your medical needs. You may even be lucky and be provided with medical insurance through your employment contract. If this is not the case you may want to consider private medical insurance as many countries now have massive financial debt and are cutting back on health and even your country of birth may not offer medical facilities when you return unless you take up residence again.
For many the idea of also perhaps visiting a local hospital where they do not understand the language the option of being able to choose where to go by taking out private medical cover is reassuring.
For women currently in work, it is therefore important to assess any dependents you may have who rely on your income or earnings and then assess if there is a need to take any insurance to cover against loss of earnings through accident, ill health or death. It also makes sense to discuss with a ‘financial adviser’ the level of cover required and if the policies should be put in ‘trust’ to make sure beneficiaries are paid out quickly and to minimize or avoid any inheritance tax.
Wills can also be a complex area for women who have moved away from their home country or married a spouse from another country. This will require specialist advice, as it is complex and will require a legal knowledge of potentially different jurisdictions and how they relate.
Special thought also needs to go into thinking about whether you own property or a business in a different country and how this can be catered for in your Will.
This is a critical area of financial planning for women to address as more and more countries reduce the benefits they pay to those who have retired or will later retire. This trend will continue in Europe and the USA as the population age and there is not enough tax to pay for those in retirement.
It is therefore essential for women to address this issue early so they have sufficient time to build up savings for retirement. Starting at 30 as opposed to 40 means you will need to put aside only half as much per month to achieve the same return when you retire.
It can also be tempting to save into company or government pension schemes as you move from company to company or country to country. Rarely however will this be the best solution unless you intend to remain in one country for well over 10 years as it is normal that benefits cannot be transferred easily from one country to another?
Given the current economic situation where governments are looking to cut pensions and increase the retirement age and many companies are also looking to close their pension schemes, it makes sense for most women to set up their own personal pension scheme which they can take with them, wherever they work or live. A personal pension scheme gives you the option to pick your own retirement age, choose whether you want to take the money as a lump sum or income and often grows free from all tax.
Clearly many people do not give the above topics the thought and time required, or even have the knowledge to address these issues themselves. Discussing these topics with a financial advisor can be cost-effective and highly beneficial especially if the adviser comes recommended through a friend or association, which has checked on their credentials.