By James Brewer, CFP®, CRPC®, AIF®

There’s a lot of information regarding women’s wealth planning. However it’s typically based on averages and rules of thumb. Often some of the media try to make it seem like it’s pretty easy if you just do these few things. Really?

When it comes to women’s wealth, what is your definition? Is it giving a certain dollar amount to charity when you pass on? Is it not worrying about how you’re going to pay your bills? Is it a worry-free retirement? A good approach is using dynamic lifetime financial advice to develop a pattern and plan, determining the building materials and then weaving these together along the journey. Let’s look at this through the lens of my mother-in-law and clothes.

My mother-in-law is an amazing seamstress. She has a pretty high-end sewing machine. It’s a brand I had never heard of until I met her. She’s been sewing for decades. My mother-in-law understands what to look for when she’s buying fabric and what it’s going to take to put it all together. She could tell me that it’s pretty easy to do once you buy your fabric, get a sewing machine and buy a pattern. In fact, she’d probably let me use her high-end machine.

I do recall when I was a kid that my mom taught me how to do some sewing. We even used a few patterns to make some outfits. I never really took to it. In fact I forgot what I learned. Some may tell me that I’m throwing money away by not doing it myself. Think of the choice of fabrics, buttons, zippers and styles I’m missing out on. Or as a parent, what your kids are missing out on. I bet you know where this is going. I would not have the cute outfits or the blankets that my children enjoy and are proud to show. (For related reading, see: What Women Want From a Financial Advisor.)

When you buy off the rack, someone else decides on material and the design. You might expect with a few alterations that things should fit. However, one size does not fit all. All women are not the same size or have the same proportions in the same areas. You likely have found that certain designers tend to fit you better than others. The good thing is the feedback loop is pretty quick. You grab the clothes, go to the fitting room and check out how you look.

A recent Employee Benefit Research Institute survey1 showed that women of different ages needed to save different percentages of their salary to maintain their standard of living during retirement. It further showed that women of different incomes also needed different savings percentages. That does not bode well for the simplistic 10% savings rule of thumb. 

There’s no quick feedback loop regarding your wealth. It is a result of turning a lifetime of income into accumulated assets or wealth. Each woman will have her own unique journey. Some will be single their entire lives and some will be single for a portion. Some will be married and some will be divorced. Some will have children and some will not. (For related reading, see: Women and Investing: It’s a Style Thing.)

As a general rule, higher income women generally need to save more money if they want to maintain their standard of living throughout their life. Most people are not planning for a reduced standard of living in their future. I believe in dynamic, lifetime financial advice. Your journey is unique. While you may be able to grab a few items off the rack, many will likely need to be tailored to better fit your needs. The longer the journey, the more unknowns. We tend to have a bias toward optimism and that the road will be smoother than what it likely will be. It’s important that you be prepared for things that may derail you.

I believe the journey starts with getting yourself organized. This organization includes clarifying your idea of wealth, not another woman’s idea of wealth. While you don’t want to be obsessed with checking where you stand on an hourly basis, it is important to know where you stand periodically to make sure you’re on track. I don’t know about you but I find it comforting on occasion to see the big sign that says I’m on the right interstate. I hate to run out of gas, especially on the wrong road. (For more from this author, see: How Compounding Benefits Your Retirement Savings.)

1How Much Needs to be Saved for Retirement after Factoring in Post-Retirement Risks: Evidence from the EBRI Retirement Security Projection Model, Employee Benefits Research Institute, March 2015

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article was originally published on Investopedia.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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