If you are a woman and are anxious about your financial situation, you are not alone. Statistics from recent studies are startling:

  • 63% of women worry about immediate financial security, and 73% of women worry about their long-term security, according to Prudential’s Pulse Survey
  • Women’s retirement balances are typically 30-40% lower than those of men, according to the World Economic Forum
  • 64% of women fear they will outlive their retirement savings, according to BlackRock’s 2021 DC Pulse Survey
  • 38% of women do not feel fairly compensated for the work they do, yet the majority aren’t comfortable discussing compensation or requesting a raise, according to the same Prudential Pulse Survey

Despite these statistics, women are predicted to control more than $30 trillion – yes, that’s trillion — in investable assets by 2030. The reasons for such a massive wealth transfer are demographic: By 2030, all baby boomers will be age 65 or older, and when those husbands die, the women will control the assets. Another reason is that women are climbing the corporate ladder faster than ever and expect to earn and manage their own wealth in the next decade.

BlackRock’s 2021 Pulse Survey found that confidence levels among female investors are low. Only 59% of women, compared to 78% of men, feel they are on track when planning for retirement. As compared to men, women earn less, take breaks from the workforce to care for others, and save less.

Given these factors, it’s not a surprise women feel insecure. However, how do we reconcile these perceptions with predictions that women will inherit tremendous spousal and parental wealth over the next 10 years? Financial security for women in retirement might be surprisingly better than they expect, although not without the potential for emotional baggage.

With inheritance, for example, comes grief. It’s overwhelming to lose a loved one, and survivors should expect a period of healing and reflection. When a women is ready to embrace her “suddenly single” status, she should consider her family dynamics, values, priorities, and goals. All may have changed as a result of her loss, and it’s important to understand the impact of those changes.

In contrast to men, women’s top priorities aren’t necessarily achieving a certain investment return on their portfolios. They may want to take a more holistic approach. Perhaps they may want to create an estate plan which promotes harmony among surviving children, or develop a gifting strategy that maximizes benefits to charities and minimizes income taxes. In some situations, a woman may want to make a gift to younger generations for specific purposes as a way to teach them about the value of saving and investing wealth. Investing may be new to some women, and their investing style and temperament may be entirely different than their spouse. She may want to align her values with her investments, e.g., focus on portfolios with an emphasis on environmental, social and governance issues. That’s why it’s important for women to consider a variety of portfolio options.

Although women may feel unprepared and insecure about financial preparations for retirement, research by McKinsey indicates upwardly mobile women will increase wealth, and women in general will inherit and control significant wealth in later life. Develop and understand your financial plan before an external event (e.g., losing a loved one) forces you to engage. We believe there is no time like the present to work with your financial advisor to consolidate and simplify your financial plan.

Author Allison A. Alexander Financial Advisor

Allison has been involved in the financial services industry since 1985. She is a member of the American Institute of Certified Public Accountants, the Illinois Certified Public Accountant Society, and the Institute of Divorce Financial Analysts.

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