The Wealth Advisors team recently issued a magazine to our clients that highlighted recent themes that significantly impacted women and their families (please reach out if you’d like a copy!). One of the articles spoke of the balance of supporting our own future with our desire to support our children. Another article spoke of the COVID-19 pandemic, also known as a “she-cession”, as it statistically impacted women in the workforce heavier than it did men.
Being a female financial advisor, I take seriously the task of making sure the women I advise have clarity and confidence in the financial strategies we work through. When I first started in this industry, I was surprised to find that women tended to be more skeptical and apprehensive to working with investments. In fact, only 26% of women in the US invest in the stock market. And women tend to hold a larger position of cash in their investments, compared to men. It shouldn’t be that way. My goal for my women clients is to help close this gap. Especially during a big change in their life – such as retirement, a job change, life change, or perhaps just a realization that it’s time to make sure their wealth is in order and working towards the right goals. It’s important to me that each of my clients feel heard, educated, and empowered to take the next step forward with their wealth.
I believe women have special financial planning needs that I greatly take into care. Some of them are the following:
- Women statistically earn less. Unfortunately, it’s true. The higher the education level of the woman, the larger the wage gap tends to be for her. Along these lines, women tend to be caregivers in times of need and must reduce their workload, as we saw happen during the COVID-19 pandemic. Less income means less savings, less pension, less social security. Therefore, less to fund your future unless appropriately planned for.
- Women must plan for longevity. Not only do women statistically have lower wages but they statistically live longer than men. Therefore, planning is even more critical to ensure that women don’t run out of money in their later years.
- Because women live longer, they tend to be the surviving spouse. From increased taxes, decreased social security income, managing household expenses now on their own, a surviving spouse has a lot to consider. It’s important to plan ahead for this.
- Women tend to need more long-term care. On average, women need long-term care for 3.7 years versus men at 2.2 years. This is a significant cost difference, given the current cost of care, that can easily derail a financial plan if not accounted for.
- Retirement doesn’t have a financial aid program, and you can’t take out a loan for your retirement. At times, women I’ve spoken with have a desire to stretch their finances in order to help support others, such as helping with student loan payments. It’s important to provide for what is important, but also balance this with knowing that you must support yourself first.
A financial plan can leave you feeling confident that you and your investments have a strategy to overcome these obstacles. If you are feeling as though you need a female partner to work through a life change and to comprehensively understand your situation, please feel free to reach out.