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Wealth & Well-Being

Women and Wealth: The Importance of Financial Self-Reliance

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If you take a moment to look around at the different generations of women in your life, you may notice quite a range in their attitudes toward money.  Older generations, raised under more traditional societal norms, often took the backseat in both earning and managing the finances. Today more and more women are earning--owning their own businesses, competing in the corporate world, and are the family breadwinners.

However, despite significant strides made by women in the working world, a disparity still exists in their participation in the finances that leaves even the most successful women vulnerable to financial shock. Although many married women are comfortable handling the day-to-day household finances, the majority of long-term financial decisions are made by the men, including retirement and investment planning. UBS’s March 2019 Own Your Worth survey of 1,700 married couples revealed that:

  • 56% of women leave key financial decisions up to their husbands.
  • 71% reported they want their husband to provide for their financial security.
  • 85% of women lack financial confidence which causes them to abdicate their role in long-term financial planning.

Unfortunately, women who do not participate in the finances are vulnerable and their family's security is put at risk. When life changes (divorce, death, disability), women may be confronted with unexpected surprises such as no life insurance benefit, a portfolio of risky investments, hidden debt, a lack of liquidity, and more.

At a time in history when women are more educated, more successful, and more influential than ever, it is even more important to find someone you trust to help you ensure you and your family are protected.

Are you prepared?

This is one of our missions to help change. 

Important Realities to Face: Longevity and Loss

No marriage is immune from death or divorce.  Even the healthiest of spouses can fall ill or suffer unexpected tragedy and the most dedicated partners can eventually seek to end a marriage.  

But for women, there is more to the story: increased risk of both longevity and loss. Women are living longer than men by an average of five to ten years and nearly half of all marriages are likely to end in divorce, with a rise in divorce over age 50. 

Also, see our related article: What Women Need to Know About Social Security and Divorce 

These escalating trends in widowhood and divorce indicate that 8 of 10 women will be solely responsible for their own finances at some juncture in their lives.  But will they be prepared to handle it? 

When a woman places her future in the hands of a spouse who may not always be around, she opens herself up to devastating loss—loss of assets, independence, happiness, and even dignity. 

The Damaging Effects on

  • Widows: Widows who aren’t involved in their family’s finances often encounter one or more financial surprises in settling her spouse’s estate. Common shocks can include:

-Her spouse made poor investment choices.

-She was not the named beneficiary on the spouse’s pension plan or retirement accounts.

-She has little or no access to the liquidity needed to manage cash flow and pay her bills.

-Her spouse did not carry life insurance.

-She has little or no relationship with her husband’s financial advisor.

-There is not enough retirement income to support her longevity.

  • Divorcees: From a financial perspective, divorce has been found to have far more damaging effects on a woman’s financial health than on a man’s. According to a 1996 survey published by the American Sociological Review, a woman’s post-divorce standard of living decreased by 27% while the male’s increased by 10%. Reasons for this include the gender wage gap and more time spent as primary caregivers for children. 
  • Gray Divorcees: Women who divorce later in life are far less likely to remarry than men. This means that women are less likely to return to a two-income household and, therefore, are at a higher risk of reaching poverty late in life. 

Living longer means that women will need more funds to survive. No matter how long or strong a marriage has been, women today cannot afford to take a back seat when it comes to their financial security. 

Also, see our related article: The Journey Forward: A Widow's Guide to Taking the First Steps 

The Solution: Building Financial Self-Reliance

The world has drastically changed for women, from both professional and personal standpoints, and the extent to which women participate in their finances can directly impact the quality of their lives. Should they find themselves face to face with widowhood or divorce, women will need to be know how to handle their own assets.

It does not matter if you are married, single, divorced, or widowed—you are responsible for your own financial independence and well-being. Your spouse is intended to be a life partner, confidant, and friend—not a financial plan. 

In our article, “Take Control of Your Financial Future: A Financial Well-Being Checklist for Women”, we outline a list of ways women can empower themselves to take control of their finances and ensure their future security and independence. 

Ready to learn how to take control of your finances and prepare for the unexpected? Schedule a complimentary Get Acquainted meeting with one of our Certified Financial Planner® professionals today.

Written by Rachel DeCarolis in collaboration with Lexicon Content Development

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