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.
 

First « 1 2 » Next