Women, Widows & Financial Transitions

Eleanor Blayney, CFP CFP Board Consumer Advocate President, Directions for Women Presentation to National Press Foundation Fellows June 12, 2012

A Womans Retirement Dilemma

In the game of golf, the ladiess tees are ahead of the mens But in the game of life, her tees are WAY behind. In other words, she has to drive much farther and harder to reach the same goal of retirement security.

A Womans Retirement Dilemma

She needs more for her retirement Longer life expectancy: (3 - 5 years) Higher medical and long term care costs But accumulates less Less time in work place (32 yrs to a mans 44) Risk aversion (both investing as well as job choice)

Lifetime Costs of Being a Woman

$143,000 for lost wages due to adult care-taking vs $89,107 for men $124,000 average long term care costs vs. $44,000 for men $434,000 career wage gap as a result of pay differences -- full-time workers only --does not consider benefits --gap increases with more education (up to $713,000)

Why the conversation needs to be different for women

$5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0
$5000 $4300 $4400 $3800 $3080 $2660

$2730
$2520

US Male

US Female

Pay Inequality

Risk Aversion

60% probability

80% probability

Graph shows expected monthly income, at two probability levels, based on initial retirement period of 25 years for a male, a $1,000,000 portfolio, invested 60% in stocks. Female assumed to live 5 years longer, save 70% of what male saves, and invests 25% in stocks.

The Dilemma beyond the Money

Women much more worried about retirement, but still not planning Reasons? --distrust of financial services --real worry may be less about running out of money, than running out of love

For Women, Retirement means Singlehood

Latest Census data shows 56 percent of women 65 or older are unmarried, compared to 24 percent of men in same age groups. By ages 75-84 63 percent of women are single

Whereas, in all age groups beyond 65, the majority of men are married (even into nineties).

For Women, Retirement means Singlehood

Implications of becoming single in retirement: Retirement may be a time of grief, moving from coupled state to being and living alone Decisions about where to live, and how to accomplish the tasks of living much more difficult Being single makes women more vulnerable to elder abuse (financial and physical)

Closing the Gap for Women

How the financial advisory community can help: More attention to womens unique issues in their elder years Better understanding of womens learning and communication styles Enlarge concept of wealth to include social & human capital Help women make better, strategic choices about career management Gain expertise in alternative housing options and communities for women: NORCs, cooperative housing Work with financial product providers to improve transparency and cost structure of annuities, reversed mortgages, hybrid long term care policies

Closing the Gap for Women

FIDUCIARY STANDARD