Once upon a time we took it for granted that a money market account would earn an above average interest rate without risking losing money. In the midst of the 2008 financial crisis, the Reserve Primary Fund, our country’s oldest money market fund was forced to lower the net asset value (NAV) of its money market fund below $1 and all of its shareholders saw a loss.
Since I spend most of my day helping people prepare for success in their finances, you would probably expect me to say that financial resources are most critical to a successful retirement. It’s true that finances are inarguably important but financial accomplishments alone don’t ensure a successful retirement.
Recently, a client who was purchasing a new home told us that a friend had advised him to get a home equity line of credit (HELOC) when he bought the house, even if he didn’t need it. He wasn’t sure he fully understood the reasons his friend gave for doing this, and since it’s a question we’ve heard before, we decided to address it on the blog.
In general, women bear greater financial risk than men. Most married women bear more risk than their husbands because they tend to be younger and have a longer life expectancy. And since women tend to earn less money than men, there is greater pressure to make fewer assets cover higher costs, particularly for single women.