All of us have a shared common experience in that somewhere during the course of our life there was, or is, a woman we truly care about. Whether it’s a mother, wife, sister, daughter, granddaughter, aunt or niece, we all know who that special lady is. What you may not know is that women need to take extra care when making financial decisions. Make no mistake, women do in fact make financial decisions just as well as men, and in many instances, better. However there are forces of nature that work against them. Women have longer life expectancies.
- Women will need to stretch their retirement dollars further.
- Women are more likely to need some type of long-term care, and may have to face some of their health-care needs alone.
- Married women are likely to outlive their husband, which means they could have ultimate responsibility for disposition of the marital estate.
Women generally earn less and have fewer savings. According to the Bureau of Labor Statistics, within most occupational categories, women who work full-time, year-round, earn about 81% (on average) of what men earn. As you might imagine this wage discrepancy can significantly impact women’s overall savings, Social Security retirement benefits, and Pensions. According to U.S. Census Bureau statistics, women are therefore more likely than men to be living in poverty at some point in time in their lives. Women are more likely to take career breaks for care giving. Women are much more likely than men to take time away from the work force to raise children and/or care for sick or aging parents. Doing so may have significant financial repercussions:
- Lost income, lost employer-provided health insurance, lost retirement benefits.
- Less savings
- A potentially lower Social Security retirement benefit
- Possibly a tougher time finding a job, or a comparable job (in terms of pay and benefits), when reentering the workforce
- Increased vulnerability in the event of divorce or death of a spouse
Women are more likely to be living on their own. Whether through choice, divorce, or death of a spouse, more women are living on their own, which means they’ll need to take sole responsibility for earning an income, growing assets and making financial decisions.
Women sometimes are more conservative investors.
Whether saving for a home, college, retirement, or a trip around the world, women need their money to work hard for them. In many cases however, women tend to be more conservative investors than men, which means their savings, while on track, may not be moving in the right direction to meet their financial goals. Women need to protect their assets.
The loss of a spouse can be a devastating, life-changing event and due to longer life expectancies, women are more likely to face this situation. According to the U.S. Census Bureau, 40% of women age 65 and older are widows compared to 13% of men, and it might surprise you to know that approximately 34% of widows are under age 65. Becoming a widow at any age can be one of the most difficult challenges a woman must face. Not only is there the emotional loss of a husband, but also the task of handling everything–including all the finances- -without the help of a spouse. Even if they have always handled the family’s finances, the number of financial and legal matters that have to be settled in the weeks and months following a loved one’s death can be overwhelming. Sadly, for many women, becoming a widow is a first step toward economic hardship. Steps to take
In the past, women may have taken a less active role in household financial decision making, but those days should be long gone. Today’s women have a greater financial responsibility for themselves and their families, so it’s critical they know how to save, invest, protect and plan for the future. Although this can be done alone (DIY) it would be beneficial to work with a financial professional to avoid the pitfalls and mistakes made by those who have traversed this path before. My mom is living as a widow, my sister and I are close, my bride of 32 years still loves me, and my granddaughters are beyond precious. So yes, I do have several very important women in my life and you can rest assured they all are well versed in the topic of Women and Money. What financial course will you chart? Ed Maass is a Certified Financial Planner, Chartered Financial Consultant, and Chartered Life Underwriter. Located in Downtown Delray Beach, you can contact him directly at 561-272- 0663, or by email at Ed@physicianswealthcare.com