Leveling The Playing Field and Tackling Financial Challenges for Women

Shalina Martos, CFP®, AAMS® | August 23rd, 2017


As a young girl, my mom was my hero.

She was a single parent, raising four active children with little to no financial support.  In her day, being a homemaker was the expected norm for women who didn’t have any post-secondary education or meaningful job prospects.   Even if my mom had entered the workforce, it is most likely that she would have been fired for being pregnant, as no job protections were in place until 1978.

Years later, her divorce made it necessary to both earn a paycheck and provide for her family of five, but showing “housewife” on a resume made it difficult to find work.  Even after securing a job, she continued to struggle with financial stability; having little to no support from her employer or laws to protect her and resources to help guide her. Times were tough for my mom, that’s for sure, but because of the struggles that she and the generations before her endured, I was able to experience a different introduction into adulthood:  the opportunities to play soccer and various other school sports, earn a scholarship, finish college, and pursue the career of my choice.

Even with the strides that have been made since the 70’s, women continue to face economic and gender inequality. All of this further translates into the wage gap, which presents a myriad of financial challenges for women.

Most notably:

  • Gender Wage and Income Gap – On average, women earn just .80 cents on the dollar for similar work and experience, as compared to male co-workers (minority women even less)
  • Women have 35-40% lower retirement balances than men across many industries
  • Women’s Social Security benefits are typically 27% lower than those for men
  • The salary history question tends to perpetuate lower earnings over the course of one’s career
  • Longer lifespan for women – On average we typically live an extra  five to six years compared to men

The collective impact of these issues compound over the span of our careers. The result is greater disparity. Quite simply, earning less over time leads to lower retirement savings and lower social security benefits. Those two categories are supposed to fund the majority of our retirement years, which can be anywhere from 25-40 years, depending on the longevity in your family history. Economic inequality varies by industry. Although we still have a long way to go, signs of improvement are slowly starting to show, especially for the younger millennials who are beginning to enter the workforce.

What are some positive steps women can take?

Get expert financial planning advice

If you’re not already working with a financial advisor, you should seek out a relationship with a professional as soon as possible, making sure you and all of your friends are working with a fiduciary, just like Avier Wealth Advisors. Here at Avier, we care about women and investing.  We place a premium on educating women in all things financial, ensuring the information we present to you is relatable, digestible, and is relevant to your financial goals.

We demonstrate our commitment to advancing women in finance by having a female CFP® on staff. To put that in perspective, there are 77,784 CERTIFIED FINANCIAL PLANNERS™ in the United States, only 23% of those are women.

We care about our clients like they are family and enjoy spending time getting to know what is important to them.

Most importantly, decisions are made after a fair amount of research, and at Avier Wealth Advisors, we wouldn’t have it any other way. Our investment philosophy is based on academic rigor and Nobel Prize winning research.

Be more involved in your financial life

Make it a priority that both you and your spouse are familiar with your joint finances and that each person can operate independently and freely. Sadly, only 27 % of married women are involved in their retirement or financial planning, while simultaneously, 42% of women are primary breadwinners in their households.

Also, concentrate on building your portfolio as a team, with each person having the knowledge of where to find the financial information.  This certainly helps to build trust between the two of you.

Women are living and working longer. If you have a choice between your kid’s college fund and your retirement fund, almost always choose your own retirement fund. This is a similar to putting your oxygen mask on first in an airplane, you cannot take care of anyone else if you don’t take care of yourself first.

Out with the BUDGET…In with the SPENDING PLAN

Over the years, I have spoken with many people about how much they need to save in order to retire. While this is an important question, I actually like to reverse their thinking on this issue.

For example, when you say, “I need to go on a budget.”   How does that statement make you feel?  Usually, your brain processes this in a negative way, moving your thoughts down that slippery slope of “I don’t have enough, etc.”

Now, take the opposite approach and say, “I need a spending plan.” Hmmm…did that feel more positive and empowering? I think as a society, we have a spending problem, not a saving problem.

Breaking down barriers and gender stereotypes will help diminish wage gaps until such a time that an equitable remedy is applied within the workforce. Not unlike the 70’s, it may even require Federal mandates. Meanwhile, it’s imperative that we prepare ourselves for the gap effect.

Hopefully, you’ll take a moment to consider the suggestions I’ve outlined in this piece and how they can enhance your financial plan.  Above all, know that the Avier Wealth Advisors team is here to support you in your journey towards equality and financial well-being!

 

Sources available upon request.

Posted by Carly Atkins on August 23, 2017