Let’s talk about money.

Women are the primary breadwinners in 40% of U.S. households. We own 30% of private businesses and hold 52% of management, professional, and related positions. We earn 57% of college degrees.

With the progress we’ve made in our careers, and the prospective inheritances we’ll receive from our parents and our spouses, women are expected to control $30 trillion of the financial assets in the U.S. by 2030.

So at a time when women are accomplishing great things, why aren’t we feeling more empowered about our financial future? There are several reasons, some a result of the pay gap, workplace discrimination, and the family responsibilities we carry. And, some are because we need to do more on our end to prepare for our financial future.

We earn 82 cents for every $1 earned by a man.

And, we take days off work or time away from our careers to take care of our children, our parents and our partners.

These interruptions in our career can significantly impact our chances for promotions, our ability to earn higher income levels and for some women, vesting in full retirement benefits.

Over a lifetime, the gender pay gap ends up costing us more than $450,000. We make less money, we spend an average of 12 fewer years in the workforce, and as a result, we have lower lifetime earnings.

So, when we retire, we receive 80% of what retired men receive in Social Security benefits.

In retirement, we are more likely to need long-term care services since we live longer than men and we will spend twice as many years in a disabled state as men do. But we are less able to afford long-term care. In 2019, the average cost for a one-bedroom unit in an assisted living facility was $48,000 per year.

According to a recent retirement literacy survey, 89% of women are not literate about retirement. 43% of us are not comfortable with market risk since the COVID-19 crisis. 70% of us are concerned about having a guaranteed income stream in retirement, and 73% of us do not have a plan to cover long-term care costs.

So, we end up shrinking our retirement dreams. Or even giving up entirely.

Take a moment and think about what your retirement dreams are. Do you plan to retire or do you think you’ll need to keep working?

Most people dream about traveling, spending more time with family and friends, taking care of family, pursuing hobbies, doing volunteer work, pursuing an encore career or going back to school, or starting a business.

If we’re going to improve our retirement literacy to help realize our retirement dreams, we have to start having conversations about money. We have to talk to our friends and co-workers about money over lunch. We have to talk to our families, to our kids, about money at dinner. We have to talk about the things we’re concerned about. We have to start asking questions. Questions like how do I protect my family if something happens to me, do I need to worry about long-term care, how do I minimize my taxes in retirement? And if we get an answer with a lot of financial jargon, we have to insist on answers that we can understand.

We need to learn How Money Works.

We need to learn basic financial concepts like the Power of Compound Interest, the Time Value of Money, and the Rule of 72.

We need to apply the 7 Money Milestones. By understanding and paying attention to all of the things that make up our financial picture – Financial Education, Proper Protection, Emergency Fund, Debt Management, Cash Flow, Build Wealth, and Protect Wealth, we have the power to take control over our financial future. The best time to start is now! Be sure to attend one of our Master Classes or our five Elements Workshops to learn more about basic financial concepts and how to apply the 7 Money Milestones to your life. And, ask about how you can get a copy of our book "How Money Works."

We need to save and invest more money. If we save $10 a day, we’ll have roughly $300 by the end of the month. If you need to start smaller, then save $5 a day. By the end of the month, you’ll have roughly $150. We have to start taking these small steps every day to help get us where we need to be in retirement. We need to start planning for our financial goals. We spend more time planning a party or a vacation than we do for our financial future. First identify what it is you want for yourself and your family. Then, you can start putting in place the things you need to do to reach those goals.

Interestingly, women are better savers than men, but we invest less than men. Some reports show 40% less. Not knowing basic financial concepts like the Power of Compound Interest, the Time Value of Money, and the Rule of 72, holds us back from doing the most with the money we do save.

And, we need to seriously consider working with a financial professional, someone who will listen, educate, inform, and collaborate with us.

Most married women defer to their husbands to make the family’s financial planning decisions. A lot of women feel misunderstood or even ignored by financial advisors. Which is why may women leave their financial advisor when their husband dies or after they divorce. What happens if your spouse is not there, what do you do if you receive an inheritance? Now is the time for you to become more involved in your family’s finances. If you work with a financial professional, insist that he or she keeps both people informed about the couple’s finances.

The financial services industry tends to lump all women into the same category. But we are not all the same. We each have our own goals. A young woman just starting her career is different from a single mom of school age children, who is different from a widow making decisions about her retirement and legacy. A financial professional can help you put a plan in place to achieve your particular goals.

While each of us is different, most women view money as a means to an end, a way to accomplish our goals, and not the end itself.

Let's Talk About Money

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Alison & David Setton

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