Growing up, I was fortunate to have had a financial role model in my mom. From the time I was very young, she taught me how important it is for a woman to take control of her finances. In the evenings, when we headed to bed, I remember watching my mother retreat to the den, where she stayed up late to organize files, pay bills, and try to make sense of the piles of documents that financial and insurance companies kept sending her. And, while my mother’s salary never matched my father’s, she believed it was important to work outside the home and always made sure she earned an income of her own.
My mother played a crucial role in helping to build a strong financial safety net for our family. Fortunately, we were spared any life-altering events that many female clients I’ve worked for over the years have had to come to terms with. There was no divorce, no early spousal death, and no major illness or job loss. Had there been, I know my mother would have been devastated; but I also believe she would have been financially prepared.
We’re familiar with the statistics but they are worth repeating. Women in the U.S., on average, live almost 6 years longer than men, making it imperative for women to consider how to stretch retirement savings that much longer.[1] A woman’s ability to save, however, is hampered by the gender wage gap. In the U.S., for every dollar on average that a man makes, a woman makes just 83 cents (with the gap far more significant for women of color).[2] The pay gap for women widens between the ages of 30 and 44, with women on average earning 82 cents compared to every dollar men earn and at age 45 and older, the gap widens even further.[3] While there are many complex reasons for these differences – including career choice, gender discrimination, negotiation skills, etc. – a major reason is many women take breaks during their career to care for young children and/or elderly loved ones. When women are primary caregivers, the pay gap increases and women on average make 75 cents for every dollar by male counterparts.[4]
Women’s financial lives can also be negatively impacted by divorce. Though divorce rates in the U.S. have been decreasing, it is estimated that roughly 35% of all first marriages end in divorce/dissolution.[5]
So, what can women do to ensure they are putting themselves in the best financial position possible? Here are a few important tips:
Regardless of one’s gender or background, it’s a good idea to be prepared for life’s curveballs and to be able to take care of your finances. However, women often have unique circumstances that may make this even more important. I am grateful to have learned this lesson early on and to now be in a career where I can help other women to be their own financial advocates.
At Modera, our advisors are here to guide you with every aspect of your financial life – and through every event that affects you. To find out how we can help you with all your financial goals, please contact us: moderawealth.com/specialties/women
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