Recently, I read something interesting over at CNN Money. The post focused on how women need to change their investing practices in order to meet their unique needs. For the most part, a woman’s long-term financial future is affected by the fact that she lives longer than her male counterpart — and often earns less money. This means that you will need more money for long term care, as well as other items that come with living a longer life.

Photo: Artofdreaming

While the earnings gap is closing, the article points out that, in general, many women are putting their financial futures at risk through their investing practices. Here are some of the recommendations from CNN Money about what women can do to make sure they stay on track financially:

Give Less to Your Children and Grandchildren

The article points out that 50% of female breadwinners actually cut back on their retirement contributions in order to spend money on their posterity. Personally, I’m not about ready to put my retirement at risk to pay for my son’s college, but it appears that there are plenty of women who are willing to make that decision. Before you help your adult children out of a financial jam, make sure your own future is on track; don’t neglect retirement investing.

Save More

Because a woman’s earning power over a lifetime is still less than a man’s, the CNN Money article points out that women’s nest eggs are smaller — even though they save at almost the same rate as men. Instead of limiting yourself to saving 10% of your income, the article suggests that you go ahead and save more in your retirement accounts to make up the difference. You’re likely to live longer than a man, so your nest egg will need to be bigger. Women may also need to invest more in stocks, using an asset allocation age rule that sees them subtracting their age from 120.

I also think it’s a good idea for women in the U.S. to have a spousal IRA. Even if you don’t have a job, you can still have an IRA and have your spouse contribute to it. This is a good way to boost retirement investing.

Keep Your Skills Sharp

One of the issues that affect women is that they often leave the workforce for various reasons. The CNN Money article suggests that women keep their skills sharp. And I agree. It’s vital that women do things to keep their earning power up. When you decide to go back to work, you don’t want to be hopelessly out of the loop. You will be much better off if you keep with industry trends. You can also ask your employer about telecommuting a couple days a week, or you can freelance. Technology offers us many opportunities to stay connected and marketable. This is an investment in yourself that can pay off down the road if you need to rely on your earning power.

On top of that, if you are still working, you can ask for more. If you aren’t being paid what you are worth with your experience and contributions, negotiate a raise. One of the most depressing stats in the CNN Money article was that women typically ask for 30% less than men ask for. And, of course, they get it. Do your research, and know what you are worth.

Bottom Line

You really do need to be thinking long term, and considering how your investment practices now can affect your future long-term. Then, adjust your strategy to reflect the fact that you are likely to need to invest differently than a male in a similar situation.