The U.S. Census Bureau shows among married couples, the number and percentage of women outearning their husbands have continued to grow since 1981, when 15.9%, or about 4 million wives, earned more than their husbands did. In 1998, that percentage had risen to 22.7% of wives ? more than 7.4 million.
Among employed women, married or not, 55% provide half or more of the household income, according to the 1995 study, "Women ? The New Providers," conducted by the Whirlpool Foundation, Families and Work Institute and Louis Harris & Associates Inc.
But what does this change mean for financial advisors? Advisors interviewed for this article varied in the number of couples with higher-earning wives with whom they work ? anywhere from a few clients to 20% of their business. Although the role reversal may cause some relationship problems, advisors say most of their clients in this situation seem comfortable in their nontraditional roles. Couples with high-earning wives may manage their finances differently and sometimes need more complicated financial plans than more traditional clients. And because two significant incomes often are involved, these couples may have more options and sometimes can plan on retiring earlier.
Who are they?
Couples with wives who outearn their husbands may not be typical, but enough of them are out there for advisors to relate situations with very different circumstances. Advisor Diahann Lassus provided three examples that show the diversity of these clients.
Until recently, the corporate world offered limited advancement for women, prompting many ambitious women to create their own entrepreneurial opportunities. "I have one couple where she owned a business and the business was so successful that he quit his job and came to work for her. They are probably in their mid-thirties. In that case, it was a really tough position for them. What happens if that doesn't work? But it has, and it's worked very well. They handled it very well in terms of their division of responsibilities," says Lassus, of Lassus, Wherley & Associates in New Provi-dence, N.J., and Naples, Fla.
Another couple are both corporate executives in their early forties. "They both make very good money, but she's in a position of higher power; therefore her compensation is about two to three times his, especially the stock options. It's off the charts. But they seem to be very comfortable with that. It hasn't seemed to create any issues for him at all," Lassus says.
With another couple, the husband lost his job, and he wasn't able to find anything that looked really interesting or cost effective, so he retired. "He takes care of all their financial stuff. She travels and has a real high-power job. For him, it was very difficult in the beginning, but he's adjusted very well and having a grand time with it now," Lassus says.
Joe Harper, owner of Harper Associates in Columbus, Ohio, and Naples, Fla., also advises a couple with a higher-earning wife and a retired husband. "She's an association president, and he's a retired civil servant. He's at home taking care of junior-high- and high-school-age children at this point, while she's working every day. He had a high-risk, very intense job. It's a relief he's not in this high-stress position, so his health and outlook on life are a lot more calm and complacent. He works a couple of days a week and enjoys having the time to spend with the children. It appears to be working very well for both of them."
A client with a very different situation is a woman widowed fairly young who remarried a tradesman. "She has an extensive portfolio, and this fellow has virtually nothing," Harper says. But they've worked things out.
Another example Harper offers is a husband-and-wife doctor team. "The wife outearns him, but maybe by only $50,000, so maybe it's $200,000 and $250,000. That was a second marriage, and they do have children and combination family," he says.
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