Women and Financial Planning, Part I

Are Women’s Financial Needs Different?

re women’s financial needs really different from men’s?  Both men and women should understand how to create a financial plan that will help them reach personal goals.  And both men and women rely on the same tools and techniques that make up the basics of financial planning.

What is often different are the attitudes and experiences men and women may bring to investing.  Here are some of the key differences.

1.     Traditionally, women haven’t had as much experience managing money .   Until about 30 years ago, most married women did not work outside the home.  And, as a rule, they didn’t get involved in the family’s financial decisions, either.  Many women – even those with their own incomes – were raised to expect that the men in their lives would take care of investing.

But things have changed.  Whether or not a woman has her own income, she needs to know how her family’s money is invested.  That’s because 80-90% of women will have to manage their money sometime in their lifetimes, according to the National Center for Women and Retirement Research.

2.   Women’s family obligations usually come first.   Studies show that men consistently put more away for retirement at a younger age than do women.¹

Why? Many working wives have smaller salaries than their husbands, so there’s not as much to put away. For many women, especially those with children, there are just more pressing priorities, like the kids’ dental work or buying a home.

If you have family obligations, especially if you’re the only breadwinner, you have to weigh your obligations against your needs. Of course, you want to put money away for your children’s education—but you also need to plan for your own retirement. Setting priorities is a key element of financial success.

3.      Women live longer, so their money has to last longer . Even though women, on average, live 7 years longer than men ², the average woman actually accumulates less money for retirement than the average man. Why?

• Fewer women have pensions. More women work part-time or for service and retail businesses that don't offer such plans. Less than half of working women participate in a pension plan. ³

• Women earn less. ⁴ So, even if a woman puts the same percentage of her salary away for retirement as a male colleague, the dollar amount is lower.

• Fewer years in the workforce. Taking time out to have children means fewer years to build up retirement funds in a 401(k) or other plan. It also may mean lower social security payments when she retires.

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Stanley K. Hunt offers securities products and services as a Registered Representative and investment advisor representative of AXA Advisors, LLC (member of NASD, SIPC) New York, NY and is an Agent of the Equitable Life Assurance Society of the United States (Equitable) New York, NY.   Equitable and AXA Advisors, LLC are affiliated companies.

40 Monument Road, Bala Cynwyd, PA 19004. Stanley.Hunt@AXA-Advisors.com

¹ Source: Annual Retirement Confidence Survey by American Savings Educational Council and Employee Benefits Research Institute, 2000.
² Life expectancy at birth is 72.3 years for men and 79.1 years for women, according to the National Center for Health Statistics, 1996.
³  US Department of Labor. "Women and Retirement Savings." 2000.
⁴ In 1999, full-time working women earned an average of 72.2% of the salary of men, according to the Department of Labor, Women’s Bureau.