If you’ve ever looked at your married friends and assumed that they have an advantage over you financially…you might be surprised.
Recent research from the Center for Retirement Research at Boston College found women who have spent most of their lives married tend to fare worse than never-married women. The reason is largely due to the declining wealth of their spouses. Because never-married women’s wealth has mostly stayed stable, their wealth has increased relative to their mostly married counterparts, according to the report.
An unexpected divorce or death of a spouse can also upend their financial plans in retirement. (CNBC)
There are other reasons why you might have a bit of an advantage over your married friends:
Sure, the buck always stops with you and that can be overwhelming at times – but it can also make life easier when you don’t have to take someone else’s situation into account. This also means that you can be more consistent with your day-to-day budget and long-term savings.
It’s not uncommon for married couples to have differing opinions on what the future holds; one spouse might be focused on long-term retirement planning while the other just wants to live for today. As a single woman, you don’t have to deal with competing ideas and goals. You can decide how you want to live and do it!
As a single woman, you have the freedom to explore different professional opportunities without worrying about how your job will impact someone else. This can mean more money over time AND allow you to save for the retirement you want. As a side note, understanding how to negotiate and taking advantage of career development opportunities can also help your bottom line.
It’s not uncommon for couples to disagree on who they might use for a financial advisor – or for a husband to make that decision for the couple. As a single woman, you have control over who you work with – and you’re able to choose who you’re comfortable with without taking another personality into consideration.
As a single woman, you’re used to taking control in many areas of your life – and that’s a GOOD thing. My goal as an advisor is to make sure you have as much confidence about your finances as possible, so you know you’re on the right path. Have questions? Let’s talk.
In a 2022 Financial Wellness Survey conducted by Ellevest, 62% of women indicated they’re concerned about climate change. In fact, “more women ranked it as a top financial concern above retirement planning (51%), credit card debt (46%), stock market (38%), and childcare costs (30%).”
This makes sense given what we’re starting to see across the globe with increasingly intense wildfires, flooding, and storms – but for women, the impact goes deeper than that.
The ripple effect created by these catastrophic events is more acutely felt by the world’s most vulnerable populations: women and girls.
That makes this not only a global problem, but specifically a female problem.
You might be wondering why I’m writing about climate change on a financial planning blog, and we’ll get to that. You’ll see how you can make a difference through your investments so that you don’t have to make a choice between helping the environment and saving for retirement; you can do both.
But first, let’s talk about what’s at stake.
Living in the United States it can be easy to look at the climate issue as something that basically affects our weather. Yes, many people in this country have found themselves in dangerous situations as they evacuate fires and lose homes to massive flooding - but compared to other areas around the world, we have it pretty good.
Here's why.
…women are more likely to live in poverty than men, have less access to basic human rights like the ability to freely move and acquire land…. In fact, women are denied property rights in half of the countries around the world. They are often barred from borrowing money for fertilizer and tools, which prevents them from successfully guiding their crops to harvest. They also can have trouble accessing markets to sell their harvest.
As soil quality worsens and water becomes more scarce, women will be less able to find the credit and financing they need to be resilient to the changing conditions. And without any possibility of buying new property, many female farmers will be stuck with ever-declining yields on their existing land.
"The majority of women lack deeds or titles to the lands that they farm, so their avenues for compensation or redress are limited when climate change adversely affects their agricultural output," Alam said. "Generally speaking, it’s not as if smallholder farmers have insurance, either, so they have to look for alternative income-generating activities, which can leave them desperate and vulnerable to exploitation." (Source)
Climate change is rarely discussed in relation to violence against women. It has become a global common concern due to its role as a contributing factor in exacerbating (sexual and gender-based violence) SGBV. Though entire populations are affected by climate change, women and girls face double victimization as human beings as well as because of their gender.
During emergencies, especially conflicts and disasters, women are at high risk of SGBV because of crisis in the family and society as well as due to sudden breakdown of family and community structures arising from forced displacement. As a result, women and girls become more vulnerable and face physical, sexual, psychological harm as well as denial of resources or necessary services. (Source)
Gendered roles in much of the world also make women more susceptible to the negative impacts of climate change. Women are the primary gatherers of water, food, and fuel, and they dominate subsistence farming, caregiving, and cleaning. These duties are more prone to feel the effects of environmental degradation and rising global temperatures as they rely heavily upon natural resources. In the future, this can drive a negative feedback loop of increasing poverty. (Source)
If you’re looking at these statistics and wondering what you can do about this insurmountable problem, take a deep breath; as women have always known, we’re stronger together. Now, it’s time for us to take that togetherness to a global level.
In the next piece, we’ll talk about how investing in your own future can be a big step toward helping others. Through ESG (Environmental, Social, and Governance) investing you’ll be able to invest in companies that can not only help your investment accounts, they’re also helping combat this crisis through their own initiatives.
Socially Responsible Investing (SRI)/Environmental Social Governance (ESG) Investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.
Depending on your employer or your industry, you might be offered different types of compensation. Most people are familiar with employers who do some sort of 401(k) matching, but what if your company offers you Restricted Stock Units?
RSUs are stock-based compensation in which an employee is granted shares in the company, but they are “restricted.” Shares are released from those restrictions based on various factors such as time with the company, or performance of the employee. Once they are unrestricted, or granted, the employee owns the shares and can hold them or sell them.
This type of compensation is pretty typical of any public or private company that issues stock and has shareholders – especially tech companies expecting high growth.
As more and more women enter STEM careers (“Since 1970, the representation of women has increased across all STEM occupations and they made significant gains in social science occupations in particular – from 19% in 1970 to 64% in 2019.”), it’s important for employees to understand how their compensation works.
Let’s break down the pros and cons of Restricted Stock Units:
Also keep in mind that shares are taxed as ordinary income in the year they vest, and you are not able to control that as you might with stock options. The value of the stock can go down, but you will still owe tax on the value of the shares at the time they vested. You will also owe capital gains taxes on any growth that occurs between vesting and when you sell the shares. (I like to call this “a nice problem to have.”)
Working with a financial planner can be a huge help when it comes to eliminating the confusion surrounding RSUs. For example, I can help you determine whether or not to sell when your shares vest. I’ll also take a look at your portfolio; accumulating many shares is great but can be a problem for your portfolio if you have too concentrated a position. And as far as taxes, I can help you create a tax-efficient strategy for selling shares and understanding how the RSUs fit into your overall financial plan.
Ready to take a look at where you are with your financial plan? So am I. CLICK HERE to make an appointment!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
If you’ve turned on the news any time during the last few months, it’s likely you’ve heard the dreaded word “recession.”
Investopedia defines recession as “a period of declining economic performance across an entire economy that lasts for several months.” The last major recession we experienced in the United States began in 2007 and ended in 2009 after the bursting bubble of the US housing market.
These days, according to The Street, a possible recession could be because of a number of factors:
1. The Federal Reserve and higher interest rates
2. There was massive fiscal stimulus during the pandemic, financed by the Fed buying bonds
3. Rising input and wage costs
4. High oil prices
5. China Is decelerating sharply
But as with anything when it comes to finances, the big question is…what does a recession mean for YOU?
If you have a solid financial plan in place, you’ve likely already “recession-proofed” your finances. However, there are a few other things you could do to better prepare:
Try to avoid cutting down on retirement plan contributions unless absolutely necessary. Missing even a small number of contributions can have a major impact on account growth. Also, down markets can actually be good for savers (hard to believe, but true!) because of dollar cost averaging.
Remember that there are always going to be periods of economic slowdown; this is inevitable in a modern economy. But taking some action, like the tips above, might minimize the impact on you personally while you wait for the economy to begin “growing” again.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels . Such a plan does not assure a profit and does not protect against loss in declining markets.
Investing includes risks, including fluctuating prices and loss of principal.
In the 18+ years I’ve worked in the financial planning industry, many things have changed – and some things have stayed the same. For example, some of the tools and technology have changed, but the basic principles and the things that keep women up at night when it comes to their finances haven’t.
The good news is that there are ways to alleviate some of these worries and the answers might be simpler than you realize.
Let’s look at the top four things that might be causing you stress and figure out some solutions.
Hang on; “enough” is too broad to get a handle on. That’s because “enough” for one person is not enough for another.
My clients and I work together to identify monetary needs in retirement. Then we take a look at how likely you are to have those needs met based on current and future savings, hypothetical market returns, inflation, and other factors.
Lastly, we can plug and run different scenarios to get to an actual amount you need to be saving (or have already saved!). If that isn’t currently possible, we craft a plan to get you to that savings rate. Having numbers, facts, and a plan goes a long way in alleviating worry.
While I am not a healthcare or health insurance expert, I can help identify tax-advantaged ways to save money on healthcare costs, such as using an HSA as an investment vehicle to pay for premiums in retirement. I also have a network of professionals to whom I can refer you to select and purchase health insurance.
Financial advisors often joke that half of our job is to keep our clients from making poorly timed market mistakes. We jest, but this is truer than not.
Being able to speak with a trusted advisor who is familiar with your situation when the market is volatile is invaluable. I guide my clients back to the plan that we outlined, which already accounts for market fluctuations. An adjustment may or may not be called for, but I am able to bring rationality and experience to the situation. Rash decisions based on fear are rarely the right move.
It is understandable that this is one of women’s largest fears. There are so many variables and unknowns:
“Will I have anyone to help care for me?”
“Will I even need care?”
According to the US Department of Health and Human Services, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and women need care longer (3.7 years) than men (2.2 years) (Source). It is pretty likely that you will need some kind of care; I work with clients on identifying what that may cost, and if you will be able to pay for those costs with your savings and investments.
Long Term Care Insurance policies are a great tool for bridging the gap between what you have and what you may need. LTCI policies have come a long way in recent years and are no longer just “nursing home insurance.” I work with my clients on finding a policy that is affordable to you and have benefits that either you or your heirs can use if you do not need the policy for care for yourself.
When it comes to most financial issues that are keeping you up at night, there is one answer that can solve almost any problem.
Education.
Financial education does seem to help women worry less about their financial security. Many women worry about their finances several times a month, but less so when they know wealth-building strategies – 50% of women who were aware of these steps were worried several times a month, versus 80% who were not aware of these strategies, the survey found. Another seven in 10 women said they worried when they didn’t know how to make their money last, compared with 45% of women who did have an understanding of preserving their wealth. (Source)
Ask questions. Seek out resources. Yes, I know that paying money for guidance can sometimes feel odd when what you’re trying to do is save money – however, working with a professional can often save you more than you’re spending on their services.
The number of single people in the US is on the rise. According to the 2021 Census Report, “there are now 122 million Americans who are divorced or widowed or have always been single,” a number that has risen from 118 million in 2019. (Source)
Whether you’re single by circumstance or by choice, there are some things that you should be aware of when it comes to your future. Estate planning is something that every adult should check off their to-do list, and creating a solid plan can vary depending on your situation.
Estate planning for single women is less about making sure loved ones are protected and more about ensuring you’re protected when it comes to medical and financial decisions.
Designating people for these roles is something you should carefully consider and determining who they are now – before an emergency should occur – allows you to clearly outline your wishes. “For those who have trouble naming a proxy due to a lack of family, an estate planning attorney can help to identify a financial institution that can serve as a proxy and act as a co-trustee.” (Source)
Let’s say you have a cousin you can’t stand and haven’t talked to in 10 years. And let’s say something should happen to you and you haven’t designated any beneficiaries for your assets.
Guess what?
Your estate has now been handed over to a probate court which will decide how your assets are distributed. They’ll start with relatives and work their way through the list. And that annoying cousin could be who ends up with your hard-earned money.
Another thing to keep in mind is, if you’re single because of divorce, in some states, like Colorado, if you don’t want your money to be left to your spouse, this requires specific action. However, “a single person does not need to worry about ancillary documents, such as a marital agreement, in order to disinherit someone.” says Kim Raemdonck, owner of Legacy Planning and Probate and current President of the Women’s Estate Planning Council.
When it comes to your assets, indicating your wishes means that YOU decide what person or charity receives your money. If there are organizations near and dear to your heart, this is a great way to leave a legacy.
When I work with a client, I’m looking at the entire picture – now and long into the future. It’s important that my clients know that everything within their control has been taken care of and it’s my job to make sure the boxes are checked.
If you have questions about living your best (financial) single life and are ready to take care of a few things you know you should…let’s talk!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Guess what? I have some good news when it comes to women and our efforts toward a balanced, fulfilling life. And it has to do with how savvy we are as long-term investors.
That’s right. At some point - while we were working to move forward in our occupations, taking care of loved ones, and trying to find time for a social life – we moved ahead of men in the area of homeownership. According to the National Association of Realtors, “single women comprise 18% of homebuyers in the U.S., compared with 7% of single men.” (Source)
On the whole, homeownership is on women’s minds: 73 percent of women say owning a home is a top priority to them, over getting married (41 percent), and having children (31 percent), according to a Bank of America 2018 Homebuyer Insights report. In contrast, only 65 percent of men said homeownership was at the top of their minds. (Source)
Purchasing a home is no small feat and is often one of the largest investments you’ll make in your lifetime. However, having a known monthly payment rather than risking rent increases every year is something that might provide you with a feeling of stability – especially as your income increases over time.
Coming from a financial planning point of view, investing in a home can also help with retirement planning. By purchasing and putting money into your home, you can often increase its equity and possibly pay it off, which could keep expenses lower in retirement.
There are a few things you should consider before you start down the real estate road:
It’s also important to have some savings over and above the closing cost of a home because there are always unexpected expenses. If you’ve been a renter, you might not realize what a new furnace or roof might cost (something a home inspector should take a look at before you buy). Regardless of known expenses at the time of purchase, there are often repairs that need to happen during the first year or two of owning the home. It’s better to be prepared for the unknown.
That really wasn’t my intention. It’s my job, as a financial advisor, to make sure you have all the information you need before you make any significant investments.
I believe that homeownership can be a great long-term investment for any woman. After all, “women now dominate not only traditional ‘pink-collar jobs’ like nursing, teaching, social work, and human resources, they are a majority of medical students nationwide (make that future doctors). They are [also] a majority of doctoral students in universities across all fields, including biology, public administration, and the social sciences.” (Source)
The good news is that a financial advisor can help you run projections for you and help answer the question, “Should I rent or buy?” I can also help you decide where to source your down payment in the most tax-efficient way. By working together, we can help clarify your goals and ensure you’re comfortable with your decision.
When it comes to long-term care, many women assume that the need for it is likely far down the road. But the truth is, planning for it might need to start now.
Sure, you might be in your 30s or 40s and in good health, but the need for long-term care – especially when it comes to women – isn’t just about your own needs. It’s about the needs of loved ones as well.
According to PubMed.gov, “Women comprise 75 percent of nursing home residents, 97 percent of professional caregivers, and the vast majority of family caregivers for elderly relatives at home.” This means that those who are personally in good physical condition could still feel the effects of taking care of a loved one.
I’ve even seen this in my own office. I had a client who had to turn down a promotion that she had been working toward for a long time because her mother developed dementia. In the end, the client needed to care for her which meant she wouldn’t be able to travel for the new position.
So, let’s talk about your options, both for yourself and the people you care about.
When it comes to your own long-term financial plan, it’s all about preparing for your future. However, when most people think of “financial planning,” they only think about retirement funds and investments. Creating a strategy around your healthcare should play a big part of this plan as well.
When I sit down with a client, we discuss several things to determine if she is a good candidate for LTCI:
It’s also important to note that women usually outlive male partners, which means they’re in the position of taking care of their significant other but are then left on their own as they age.
We also model scenarios where long-term care is needed, and then create models with and without LTCI. We ask questions like:
I know many people are reluctant to purchase LTCI because they think that if they don’t need it, the money will be wasted. But plans have really evolved over the last several years and there are many options now, including hybrid policies that combine long-term care with life insurance.
At the beginning of this piece, I mentioned a client who had to postpone her career development because it was necessary for her to take care of a loved one. And this is a big deal – many of us have worked too hard for too long to have our careers derailed by something that could have been planned for and prevented.
In the next piece, we’ll discuss your options for aging parents and how you can start the conversation about long-term care.
Have questions so far? Let’s talk about them. CLICK HERE to schedule a call!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
While women have always been statistically less likely to take control of their finances or increase their financial literacy, pandemic impacts have certainly compounded the problem.
Single women and women of color, in particular, have faced unemployment setbacks since the beginning of lockdown and stay-at-home orders in the spring of 2020.
As communities shut down last spring to mitigate the spread of COVID-19, women felt the financial shock immediately. The Bureau of Labor and Statistics reported that women accounted for 55% of job losses in April 2020. Later that year, BLS issued a report confirming that the recession had a more significant impact on women.
More than a year later, women continue to leave the workforce due to limitations created by the pandemic. In December 2020, women accounted for 86.3 percent of all job losses.
Some news outlets have observed that the total job loss for women has undone some of the significant workforce gains made since the 1970s and 80s. One Fortune reporter wrote in February 2021 that:
“Working women have now lost more than three decades of labor force gains in less than a year.”
In addition, women of color have experienced an even sharper employment decline, according to BLS statistics:
Across demographics, women continue to face workforce challenges that could place them at a disadvantage.
The effects of this historic job loss will follow many women over time. While many will return to the workforce, a significant percentage will accept lower-paying or part-time positions and struggle to regain their previous income or employment levels.
As reported in this piece by GMA:
“When women do leave the workforce, whether because they lose their jobs or take time out for personal or family reasons such as childcare, they return to a trajectory of decreased pay over the course of their careers.”
As of June last year, 52% of women had already experienced these changes to their employment:
Those shifts could result in smaller retirement funds for women over the course of their careers as they place short-term spending priorities over long-term financial planning.
Single women also lose Social Security and other savings opportunities without a partner’s income to rely on. Unpartnered women also feel a more desperate need to find a job, regardless of pay, hours or benefits, so could return to work at a disadvantage.
In addition, workforce changes for women affect the overall economy in addition to individuals and families.
For women who want to improve their employment status and financial position, here are a few places to begin:
When you take control of your financial education, you feel more empowered to set realistic savings and retirement goals.
Whether you need a few hours of debt and retirement planning or a complete financial plan, reach out to me for a complimentary, 30-minute consultation call. I can also place you in touch with other professionals who can help with budgeting and caregiver assistance services.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
