It's apparent that Americans, both women and men, have not
saved enough money for retirement. Studies have increasingly
indicated that many baby boomers have no financial plan in place
to protect themselves against outliving their assets and the
rising cost of health care should they live longer than expected.
So what makes women so much more vulnerable than men?
It's a phenomena seen in every population: women live longer
than men by four to five years. At first, people tried to
explain this fact by saying that men did more dangerous things
and therefore died younger. Men ride motorcycles, don't see the
doctor regularly and take more risks. Realistically, these
explanations didn't explain much. It seems women just live
longer. By age 85, there are roughly six women to every four
Women are not only caring for their children, but they are also
caring for aging parents. Overwhelmingly, women feel it is
their duty to care for aging parents, but few plan for it. And
women often don't realize the emotional and financial toll that
caregiving can take. For generations, women have been expected
to be wives, mothers and community volunteers. In fulfilling
these roles, they are supposed to be cooperative, supportive,
understanding, and gentle while providing service to others.
The costs associated with these stereotypical roles are further
exacerbated by the caregiver's inability to focus on a more
The submissive view of women still affects them in the
workplace. Despite the volatility in men's earnings during the
recent recession, men still out earn women by a large margin.
In fact, the typical male worker with a bachelor's degree earns
about $5,000 more than the typical female worker with a
graduate degree. The total number of women in management,
business, financial occupations, and service occupations has
increased, but their real earnings in these sectors have not
kept the same pace. Maternity leave, balancing home and work,
and limited ability to travel are also considered challenges to
women's rise in management.
It is important to realize that in order to tip the scales
toward women in the workplace, there has to be a change in the
perception of women, not in their qualifications. Over the past
decade we have seen dramatic increases in the education level
of females, to the point where women now outnumber men in
institutions of higher learning and graduate at higher levels
than men. This means that women do not lack the credentials
necessary for advancement in the workplace, but that
organizations are simply overlooking women for higher-level
Health Care Costs.
Women, particularly Hispanic and low-income females, have been
hit harder than their male counterparts by the weak economy and
higher health care costs, according to a report released in May
of 2011 by the Commonwealth Fund, a private foundation working
to improve health care delivery. While rates of chronic
conditions such as diabetes and high blood pressure are similar
to men, women are twice as likely to suffer from headaches and
more likely to experience joint, back or neck pain. These
chronic conditions often require regular and frequent treatment
as well as follow-up care.
Trends are changing. Regarding saving and spending, American
women say they're making deep and permanent changes in their
personal finances. An estimated 44 percent are saving and
investing more, 31 percent have changed living arrangements to
save money, and 24 percent have decided to postpone retirement.
What has motivated this transition? Is it the fear of ending up
alone or dependent? Is it the changes in health care laws? Or is
it simply that women are learning to enjoy the process of
accumulating wealth and achieving success without the guilt and
fear they traditionally experienced?
Proper planning can help develop ways to adequately address these
concerns and narrow the disparity of the risk associated with
women outliving their assets before men.
FPA member Catherine M. Seeber, CFP®, is a Principal and
Financial Advisor with Wescott Financial Advisory Group LLC