Women and Money
Katie Martin, CFA, CFP®
March 4, 2021
I love March! Not only does it represent the arrival of spring, but it’s also Women’s History Month – a special time to recognize and commemorate the vital role of women in our history. March 8 is designated as International Women’s Day, which this year is themed “Choose to Challenge.”
In honor of this theme, I encourage you to accept the challenge of taking charge of your financial future. This is certainly an important message for everyone, but when it comes to financial planning for women, there are some unique considerations that make it even more critical:
- Women live longer
- The average life expectancy for women is 81 years old, compared to 76 for men.1 And for those women who have already reached age 65, you can expect to live to almost 86 years old. Since we tend to live longer, it’s even more critical that we have a plan in place to ensure we don’t outlive our assets.
- Women make less than men
- Obviously, this is not true in all cases. But as a whole, that’s what statistics show. According to the Bureau of Labor Statistics, women had median weekly earnings in 2019 that were 82% of those of men.2 Women are also more likely to take time out of the workforce to care for family (kids, parents, or spouse), which can reduce their total lifetime earnings. Since we may not earn as much, we need to be more thoughtful on what we do with that money to make sure we are saving and allocating appropriately for our future goals.
- Women tend to be less confident about investing
- Again, this may sound like a bit of an over-generalization, but it is supported by research. A recent study by Merrill Lynch found that only 52% of women say they’re confident about managing investments, compared to 68% of men3. Investing is how we generate a higher return, and we need to be careful to not let our lack of confidence keep us from taking the steps necessary to reach our goals.
Teaming up with a financial advisor can be a key step in taking charge of your financial future. It’s critical you find an advisor with whom you feel comfortable and can communicate with easily. You need to feel heard, and the unique goals and priorities you have as a female should be understood. And this doesn’t just go for single women – married women need to feel like they have a voice at the table, too.
Are you up for the challenge?
1 Source: National Center for Health Statistics, https://www.cdc.gov/nchs/products/databriefs/db355.htm
2 Source: Bureau of Labor Statistics, https://www.bls.gov/opub/reports/womens-earnings/2019/home.htm
3 Source: Merrill Lynch, https://www.ml.com/women-financial-wellness-age-wave.html