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The Difference between Women and Men, Financially Speaking (Part 1)

Financially speaking, women often are in very different circumstances than their male counterparts.  The financial headwinds specific to women can affect their ability to achieve financial security.  The good news is today's women have never been in a better position to achieve financial security for themselves and their families.

More than ever women are successful professionals, business owners, entrepreneurs, and knowledgeable investors.  Their economic clout is growing as women earn college and graduate degrees while seeking to integrate their work and home lives to provide for their families.

So what financial course will you chart?

Some key differences

Financially speaking, it is important for women to understand what they might be up against:

Women have longer life expectancies.  Women live an average of almost 5 years longer than men.  A longer life expectancy presents several financial challenges:

  • Women will need to stretch their retirement dollars further
  • Women are more likely to need some type of long-term care, and may have to face some of their health-care needs alone
  • Married women are likely to outlive their husbands, taking ultimate responsibility for managing the money and  settling the marital estate

Women generally earn less and have fewer savings. According to the Bureau of Labor Statistics, within most occupational categories, women who work full-time earn only 81% (on average) of men.  This wage gap can significantly impact women's overall savings, Social Security retirement benefits, and pensions.

The dilemma is that while women generally earn less than men, they need those dollars to last longer due to a longer life expectancy.  With smaller financial cushions, women are more vulnerable to unexpected economic obstacles, such as a job loss, divorce, or single parenthood.  According to U.S. Census Bureau statistics, women are more likely than men to be living in poverty throughout their lives.

Women are more likely to take career breaks for caregiving.  Women are more likely than men to take time out of their careers to raise children and/or care for aging parents.  Sometimes this is by choice.  By moving in and out of the workforce, women face several significant financial implications:

  • Lost income, employer-provided health insurance, retirement benefits, and other employee benefits.
  • Less savings
  • A potentially lower Social Security retirement benefit
  • Possibly a tougher time finding a job, or comparable job (in terms of pay and benefits), when re-entering the workforce
  • Increased vulnerability in the event of divorce or death of a spouse

Women are also more likely to try to balance work and family by working part-time, which results in less income, and requesting flexible work schedules, which can impact their career advancement.

Women are more likely to be living on their own.  Whether through choice, divorce, or death of a spouse, more women are living alone.  This means they are solely responsible for protecting their income and making financial decisions.

Women sometimes are more conservative investors.   Whether by choice, divorce, or death of a spouse, more women are living alone.  This means they are solely responsible for protecting their income and making financial decisions.  

Women need to protect their assets.  As women continue to earn money, become the main breadwinners for their families, and run their own businesses, it's vital they take steps to protect their assets, both personal and business.  Without an asset protection plan, a woman's wealth is vulnerable to taxes, lawsuits, accidents, and other financial risks that are part of everyday life. But women may be too busy handling their day-to-day responsibilities to take the time to implement an appropriate plan.

     Continue to part 2: The Difference between Women and Men, Financially Speaking



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