My mum taught me that as a girl I could do anything a boy could do. I should expect the same opportunities—in school, work, sports—in life. I believe this served me well growing up. Then came the rub.
Now I advise people about their financial planning and investments. The more conversations I have with men and women as both couples and singles, the more differences I see—in the conversations, in the decision making, and in the numbers.
As it turns out, what I witness in our practice is not unique. There are well-published statistics that may explain why conversations with men and women differ even though their goals are largely the same.
Different gender, different resources
Over their lifetimes, women on average¹:
- Live five years longer
- Earn 20% less
- Work 12 years less
- Save 22% less for retirement
- Spend 13% more for healthcare in retirement
- Receive 23% less in social security
The reasons behind the earning and saving gap are multiple and complex. Too big to address in this blog post, for sure, but couple the statistics² above with the following:
- The average women’s income drops 50% when her spouse dies, but her expenses only decrease by 20%.
- 50% of elderly widows were not poor before the death of a spouse.
- The average age that a woman becomes a widow is 59 years old. Among women 65 and older, 60% are single compared to 29% of men.
It is strikingly clear that there are very real financial differences between men and women. These differences need to be accounted for when planning for the future.
Men and women tend to have the same goals; it is how they get there that is different. We ask the same types of questions about our financial future. We all want to know:
- Am I saving enough? Will I have enough?
- Do I have a smart financial plan?
- Should I change my investments? Do I need insurance?
- How do I provide a legacy for my children?
It is in the answers to those questions that the differences between men and women are exposed. Good planning will take into account those differences whether you are a married couple or single.
As it turns out, the statistics also show that the way women feel about money and finances differs from men. Women worry far more about running out of money, healthcare expenses, and making good investment and financial decisions.
As a group, women feel less confident in their knowledge of money, investing, and finances. Recent studies³ show that only 7% of women are very confident in their ability to retire with a comfortable lifestyle. 53% want information that is easier to understand, and only 35% use a professional advisor for assistance.
What women AND men should do
Whether you are a woman or if there is a woman important in your life, be sure that your entire plan—savings, social security and pensions, investments, insurance, healthcare and estate planning—accommodates the unique differences in gender, both the practical and the emotional.
When it comes to money and finances, women are different from men. Embrace it. Plan for it.
¹ "Women and Retirement” presentation from W.P. Carey
² "Why Women Worry” research study from The Hartford and the MIT AgeLab
³ 14th Annual Transamerica Retirement Survey of Workers