Woman on Bench

Financial Planning for Women – Part 1

Woman on BenchSince Inspired Financial specializes in working with women, we are often asked, “Why do you provide financial planning for women?”

Women’s financial needs are underserved and often overlooked in the financial planning profession. Awareness of these needs must be brought to light during the planning process to plan effectively for them. It is common to see the traditional financial advisor direct his questions to the husband and carry on with very little attention given to the wife’s thoughts or concerns. I think it’s safe to say that a husband and wife do not always have the same opinions or expectations for their future, wouldn’t you? For single women, they are often belittled and their needs ignored. We have a passion for being an advocate for women so they have an equal voice at the table and are respected.

There are three major challenges that most women face which, if left out of the financial planning process, will surely impact women when they need help the most:

The Age Gap

  • Women have a longer life expectancy than men, outliving men by about five years on average. Women who reach age 65 can expect to live an average of 20 more years, and those who reach age 75 an additional 13 years.1
  • More than two-thirds of Americans age 85 or older are women.2
  • More than 70 percent of nursing home residents are women; their average age at admission is 80.3

The Wealth Gap

  • Women often have fewer resources and lower net worth in their later years. Women are hit hard by changes to their finances caused by caregiving, divorce, widowhood, and job loss.4
  • About half of women that are 75 or older live alone and have income of 75 percent of what older men make. Although things have improved in terms of the gender wage ratio (currently at an all-time high of 77.8%) the ‘typical’ woman only owns 36% of the wealth that her male peer does.5

The Care Gap

  • Women spend most of their lives caring for others: children, spouses, and aging parents. Four-fifths of those who give constant care are women.6
  • In a 1999 study by the National Alliance for Caregiving and the National Center for Women and Aging at Brandeis University, it was found that over their lifetimes, caregivers lost an average of $659,000 in missed wages, Social Security benefits, and pension benefits while providing Long Term Care to a family member.7

When it comes time for hard-working women needing care, they are often on their own. The men in their lives, and some of their friends, have passed away and the ones that are left are struggling just to take care of themselves. For some, adult children help with their care, but they often have families and jobs of their own.

In future blog posts, I will share how these major challenges that women face are factored into our advice for many financial planning areas: Social Security, Long Term Care, Widowhood, Divorce, and Getting Married Later in Life to name a few. Having the right financial planner as your trusted partner can make all the difference in the world.

 

1 National Center for Health Statistics (NCHS). “Health, United States, 2006.” Table 27, Page 176. Data year is 2004.

2 U.S. Census Bureau Estimates. Data year is 2005.

3 AARP Public Policy Institute. Data from the 2004 National Nursing Home Survey.

4 Women’s Institute for a Secure Retirement

5 Survey of Consumer Finances

6,7 U.S. Department of Labor. Advisory Council Report of the Working Group on Long-Term Care, November 14, 2000.

“My own life-changing transition inspired me to start Inspired Financial so that I could help other women and their families navigate their difficult life transitions and emerge confident, financially secure and empowered to deal with future life events.”

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