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?

Longevity. It’s a phenomenon seen in every population: Women live longer than men. In the most recent study by the Centers for Disease Control and Prevention, life expectancy at birth in the United States for the total population was 78.8 years—76.4 years for males and 81.2 years for females. 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. When they reach 85, there are roughly six women to every four men. But whether that’s a bragging right depends on the quality of life the women experience in those additional years.

Health-care costs. Because of their longevity, in fact, women have a greater likelihood of spending money on a series of multiple and chronic illnesses. Their rates for chronic conditions such as diabetes and high blood pressure are similar to those of men, but women are twice as likely to suffer from headaches and more likely to experience joint, back or neck pain. These conditions often require regular and frequent treatment as well as follow-up care.

One thing is moving in the right direction for women, though: the cost of insurance. Before 2014, the National Women’s Law Center found that the best-selling insurance plans were charging women more for health-care coverage than men. A research study at Mercer found that women were paying more for these health benefits yet receiving less coverage. Because women tend to use health-care services more than men, the disparity in benefit levels was having a greater impact on them financially. But beginning in 2014, an Obamacare provision prohibited insurance companies from charging higher rates based on gender or any pre-existing health conditions. As the economy improves and the unemployment rate falls, companies now have the opportunity to attract and retain female talent with their benefits. The right health-care package may be the key to a more engaged, productive and loyal workforce.

Caregiving. Women are not only caring for their children but also for aging parents, feeling it is their duty to do so. 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 were supposed to be cooperative, supportive, understanding and gentle while providing service to others—mostly at the expense of tending to their own health-care needs. The costs associated with these roles were further exacerbated by the women’s inability to focus on more lucrative careers.

Income inequality. The view of women as subordinate still affects them in the workplace. Despite the volatility in men’s earnings during the recent recession, men still outearn women by a large margin. A report from the White House Council of Economic Advisers shows that although women are becoming more educated and make up a larger portion of the country’s workforce, they consistently earn less than men, even when they have similar levels of education. Women face challenges rising in management because of maternity leave, their need to balance home and work and their limited ability to travel.

Education misconceptions. But 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. So it’s not that women lack the credentials necessary for advancement in the workplace, but that organizations are simply overlooking women for higher level positions. In other words, when a male and a female with the same credentials apply for the same job, the male counterpart is more often chosen over the female.

It’s not all doom and gloom, though, as the gap is shrinking every year. A recent study by ADP Research Institute found that women are more likely to save than men, and they’re saving a higher percentage of wages. According to Ahu Yildirmaz, head of the institute, financial advisors and other institutions have apparently made an impact in raising awareness among women about the importance of saving.

What else has caused women to save more? Is it the fear of ending up alone or dependent? Is it the changes in health-care laws? Or is it simply that they are learning to enjoy the process of accumulating wealth and achieving success without the guilt and fear they traditionally experienced?

Regardless, female vulnerability is a difficult concept to plan around. But there are specific techniques you can use to narrow their risk of outliving their assets.

• Suggest they start saving now and stay healthy!

• Stress the importance of them investing in their own human capital by taking classes to remain relevant in their careers;

• Ensure that they are taking full advantage of their company retirement plans by maximizing contributions or contributing to an after-tax savings account;
• If they are married, get them more involved in their financial matters;

• Also if they are married, run a capital needs analysis to ensure they are adequately protected if they lose a spouse;

• Stress-test their long-term projections by assuming they will have longer life spans with increased health-care costs; and

• Provide them with resources when they are helping their children and aging parents financially.

You will find that women are more apt to discuss their health and family before they talk about their financial affairs. It’s best to begin a comfortable dialogue about money with them.

In 2013, our firm Wescott Financial Advisory Group held a women-centric client event. One of the questions posed was, “What keeps you up at night?”

Surprisingly, lack of money was not the primary response, but lack of control. Because most of us do not like feeling unbridled, we tend to ignore the emotion. But without proper planning, most fears become fact. Become a financial mentor to your female clients; become that person who can help them approach finances in a more positive way. It takes a keen awareness of these vulnerabilities, some planning and a little discipline. Women can break through these barriers with the right planner, the right tools and the right attitude.


Catherine M. Seeber, CFP, is a principal and senior advisor with Wescott Financial Advisory Group in Philadelphia.