This month we celebrated International Women’s Day on March 8, a global day celebrating the social, economic, cultural and political achievements of women. Next month we celebrate financial literacy month and even with the great strides women have made, this is still an area where we struggle.
As a financial planner, there are several statistics that give me great concern for many women. Did you know that all the jobs lost in December 2020 belonged to women? Adding to a cumulative total job loss for women in 2020 of more than 5 million!
For those still working, the gender pay gap continues to persist and by retirement the cumulative earnings gap between men and women is over $1 million. A survey by S&P Global reported only 26% of women have money in the stock market and those with savings keep most of it in cash. Lastly, 90% of women will make financial decisions on their own, if they aren’t already, either due to divorce, outliving their spouse or simply being savvy. Yet, according to a Fidelity study, less than one third of women feel confident making investing decisions.
Having more money to invest leads to greater wealth accumulation. Women will outlive men, yet most women over their lifetime will earn less and save less than men. Some women may choose to take time out of the workforce to care for children or their aging parents, lowering pension and social security dollars, and even those who remain in the workforce, on average earn 80 cents to every $1 a man makes. Retirement savings is a struggle for everyone, but for women the odds are stacked against them. Even more troubling is many women are “in the dark” about their financial resources and liabilities and many are unwilling to take a risk in the stock market.
Every couple manages their financial house differently, some spouses take more ownership than others, and it is like any household chore — divide and conquer in order to keep up with life. However, this doesn’t excuse ignorance of financial matters. More often than I would like to admit I speak to women who have recently lost their spouse and are not only grieving, but are completely blind to their financial assets, liabilities and general income needs to run the household.
Fortunately, proper planning can help to prepare women financially. For married couples, I have found that as men age, many want their spouses to get more involved with the finances to make sure everything is in order if something were to happen to them — but many women have no interest. Whether single, married or widowed, it is important to put together a financial plan that takes into consideration assets and liabilities and properly plans out your lifetime income needs.
Women must also make investing a priority. Cash is a great asset, but in order to build the type of wealth that can provide a person with financial freedom, some of it must be invested. A well-designed financial plan will provide a clear picture of what you need to save and invest to reach your specific retirement income needs. We work hard to earn our money, it should be working hard for you and the best way to do that is with a sound investment strategy.
Make your financial wellness a priority. Don’t be a statistic; take a few hours to create a plan, get educated and check in one time a year to remain informed and up to date on your plan. This isn’t about being “interested,” this is about being engaged and taking control of your future. I promise you, you are worth it.
Stephanie Mackara is a wealth advisor at Charleston Investment Advisors LLC. Though the contents of this article should not be construed as investment advice, feel free to reach out to Mackara at email@example.com
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Updated March 11, 2021: This sentence was udated to 5 million instead of $5 million.