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Women and Financial Wellness – A Recent Study

  |   Financial Planning


Merrill Lynch, in partnership with Age Wave, recently released Women & Financial Wellness: Beyond the Bottom Line, a study that highlights the particular challenges women face in preparing for their financial future.

While solutions to some of the challenges are within women’s control, such as becoming better educated about (and more comfortable with) investing at an early age, others are less so.   For example, the study reports that:

•  Although the gender pay gap has improved, it is STILL the case that women earn about $0.82 for every $1 men earn.

•  In addition, the average woman spends 44% of her adult life out of the workforce (compared to the average man who spends 28% of his adult life out the workforce).

•  The average woman has 3 times LESS wealth (defined as the total of all financial resources including earnings, investments and retirement savings, and other assets such as property) than the average man.

•  Women, on average, live 5 years longer than men.

So not only does the average woman earn less, she works for less time and therefore has less time to save, and she needs her resources to last for a longer period of time.

The other big challenge that women face is their lack of confidence in investing. In fact, the study reports that in a survey of women 18 and over, 41% reported that their biggest financial regret was not investing more of their money.  (Of course, we should be mindful that this study was conducted during a time of very strong investment returns.  If this question was asked in 2008/2009, the results may have been very different!)  35%reported that their biggest regret was not choosing a higher paying career.

In response to the report findings, below are a few things I think are needed to improve financial wellness for women (and most of these apply to men too!).

Convince women …

…that investing is not a “guy thing” or only for those who “like to take big risks.” I sometimes find it odd that the majority of my investing discussions outside of work are with men.  Why aren’t more women talking about investing?

Force savings

It has to become a habit like brushing our teeth. And, like any habit (unfortunately, good and bad), the earlier it starts and the longer it goes on, the harder it is to break.

Maintain and improve skills

Existing the workforce should not be an excuse to let skills lapse.  There are many free tools available to help maintain, and even improve, existing knowledge.  Technology is simply moving too fast and lacking the basic, current skills will severely limit future employment opportunities. Women cannot afford to fall even further behind in the pay gap.

Start talking…

…to our daughters, sisters, aunts, and mothers about money and investing. It is not and should not be a taboo topic.  (Back to the report again… the findings indicate that 61% of women would rather talk about their own death than money!)

AUTHOR - Tammy Wener

As co-founder of RW Financial Planning, Tammy oversees the financial planning process for all clients and manages the day-to-day operations of the firm. She truly enjoys getting to know her clients and is not shy about asking questions. Tammy has 15+ years of experience in the financial planning and estate planning fields and has worked with a broad range of clients including: couples simultaneously planning for financial independence, caring for their parents, and saving for college; newly widowed and divorced women looking to become more financially literate; young couples just starting out; families juggling the demands of a child with special needs; and financially independent individuals and couples exploring “what comes next.”