Financial Planning for Women — Are you Prepared for your Future?

March is Women’s History Month, a time to commemorate and celebrate women’s vital role in American history.

But there is a sector of American life in which women are still largely underserved — financial planning and security.Women have a ton of clout in the marketplace, community affairs, education, business, politics and finance. All you have to do is follow the data to see that this is true:Women comprise 51% of the U.S. population and a whopping 65% of the workforce. In addition, they are the sole heads of 32% of American households, 60% of college students, and in the U.S., they control more than 80% of spending. In fact, Fortune recently reported that women control about $14 trillion in the United States, the equivalent of the combined gross domestic product of China and India.You can’t argue with numbers like that. Women have a ton of economic influence. Despite this, they face the additional challenges of caregiving, longer life expectancy, and earning less as they age.Again, let’s look at the data:In the U.S., men live an average of 76.3 years — women live 81.4. This extra five years in retirement means five more years to pay, and plan for. 71% of people 85 years or older are women, yet the median income for older women is only 53% of that of older men, revealing a serious deficit of financial planning and security for women, especially when it comes to retirement preparation.If that weren’t enough, women have the added onus of providing 70% of unpaid caregiving, one of the effects being that they are 2.5 times more likely to end up in poverty than non-caregivers. And if they’re single? They’re now 4 times as likely to end up in poverty than married women.Despite all this, women as a whole fall behind their male counterparts when it comes to financial planning.The situation seems bleak, but it doesn’t have to be. The special challenges women face, coupled with their unequal representation in financial planning, merely highlights the need for one of two things: specific conversations with their financial advisors, or finding one.So, what’s stopping them?

Women & Financial Planners

With higher representation in education, the workforce, spending power, and even the population, why are women underserved in the financial services industry? There is still a huge gap between the women who have a financial planner and the women who want (and need) one. In fact, according to Coqual, 75% of women under 40 don’t have a financial advisor. That’s a lot of investing and compounding interest years wasted.So, why are so few women getting the help they need? The answer could be a lack of female representation in the financial sector. Though at NEST Financial, our CFP® is the wonderful Gloria Park, according to Barron’s, only 15 - 20% of financial advisors are female. And while women should feel free to work with whichever advisor they wish, male or female, the gender gap could be an additional barrier.  A survey by Boston Consulting Group found that over 70% of women that do have financial advisors were unhappy with the level of service they received due to being stereotyped and condescended to, among other reasons. The advisors, 80 - 85% of whom are male, made assumptions about women’s goals and risk tolerance, thus limiting their investment options. These miscommunications no doubt contribute to the gap between women who have a financial advisor and women who don’t. The good news is, the financial industry is wising up to women’s significant role in the workforce, wealth building, and making the majority of household financial decisions. We are seeing a huge response to this shift, and professionals are increasingly focused on being more responsive to their female clients’ financial needs. The industry is beginning to understand how much economic power women really hold. Finally.

How can women establish financial security?

Plan for the future

We’ve talked about it before: establishing financial security for women and men alike begins with planning, both for retirement years and unexpected events and expenses. Remember, women live longer on average, and it’s important to keep those extra years in mind. And for women reading this, consider how others’ incomes, or loss thereof, could affect you and/or your dependents.

Life Insurance

You never need insurance until you need it. If you own a vehicle or a home, you’re required by law to keep these assets insured. But life insurance is something many people haven’t prioritized. And that is a risk you shouldn’t take. Many women cite health issues, the death of a spouse, or their own death as a major concern for their financial future as well as that of their dependents. So, if you haven’t recently done so, check your life insurance. Ensure that if the unthinkable happens, you won't have to worry about finances. And if you aren’t insured… It's time to look for a policy. Reach out to your financial planner for assistance. She can help.

Estate Planning

You’ve died, so all your financial concerns have disappeared. Or maybe you’re incapacitated. You’re sure someone will make the best decisions for you and your estate. Right? Wrong.In either situation, there are still decisions to be made. Decisions about how your estate and assets should be handled, how any final expenses and debts should be repaid, who holds your medical power of attorney, or who will receive your beloved Beanie Baby collection. A surprising number of women, single and married, don’t have wills and haven’t provided for their dependents. Having an estate plan in order can help settle these big questions. You owe it to your loved ones to plan for these things yourself, taking the burden off them during an emotionally taxing time. 

Long-Term Care

As the heavy lifters of caregiving, women have a lot to think about when it comes to long-term care of aging parents, and of themselves — how to manage the time it takes, the resources it requires, but most importantly, how much it costs. Understanding the ins and outs of long-term care insurance is critical in planning for this stage of life.

It's About You

If you are one of the 75% of women in the U.S. who don’t have a financial advisor, it’s time to set your fears aside and find one. Seek out someone who understands where you’re coming from and where you want to go. Talk to an advisor who encourages questions, but just as importantly, asks you questions. She’s going to need your input to help you create the financial life you dream of.Ask around. Talk to other women who have successfully interviewed financial advisors. Talk to your family, friends and colleagues. And most of all, conduct interviews until you find the right fit. At the end of the day, your financial planner should work for you!If you’re ready to start planning for your future, reach out to us at info@nestfinancial.net. We are an Austin-based, boutique wealth management company that is passionate about helping Austin families, business owners, and individuals. Let Gloria and Sean assist you in creating a comprehensive financial plan to get you on the path toward your financial security

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