Women, Wisdom, and Wealth

originally published in the July-August edition of AACI’s VOICE

Part I
I recently presented a seminar with this title to a group of more than 20 women at AACI in Jerusalem. The following day, the husband of one of the participants approached me saying, “My wife told me everything you discussed and there was nothing that I couldn’t hear. Why was the seminar for women only?”

The simple answer is that women think, talk and relate to money differently from men. The uncomfortable truth, however, is that most women are likely to find themselves dealing alone with complex or vulnerable financial situations. And they may be ill-prepared to do so.

Women today are better educated and hold more executive and professional positions than ever before. They manage the household, maintain the monthly budget and are smart shoppers. Nevertheless, when it comes to financial planning and investing – women, including women who feel confident and secure in most areas of their lives, report a lack of confidence. Many feel intimidated by or unwelcome in the financial world, a domain traditionally dominated by men.

For a woman experiencing widowhood or divorce, these feelings are often intensified – she may be totally unsure of how she’s going to manage the longer-term financial issues alone.

According to a new report by the Society of Actuaries, women today face five key risks as they approach and move through their retirement years:

i. Outliving Assets – Women typically earn less than men – 24% less, on average, according to the latest annual survey from Oketz Systems. Moreover, women tend to take more time out from their careers to raise children and care for aging parents. The time a woman spends out of the work force reduces her pension accumulation. Due to her life expectancy, which is longer than a man’s, and lower retirement reserves, there is a greater chance that a woman’s financial resources will be insufficient for her needs.

ii. Loss of Spouse – Because women have longer life expectancies than men and traditionally are younger than their husbands, periods of widowhood of 15 years or more are not uncommon. For many women, the death of a spouse is accompanied by a decline in her standard of living.

iii. Decline in Functional Status – Women are more likely than men to have longer periods of chronic disabilities and, as a result, are more likely to need long-term care.

iv. Healthcare and Medical Expenses – While a healthy 30-year old will spend an average of NIS 100 per month on health care, the average 70-year old will spend NIS 1000 per month. These costs continue rising with age.

v. Inflation – Inflation can greatly impact women as a result of their long life expectancy. Money saved for retirement will lose its buying power if it is invested too conservatively – a problem plaguing many more women than men.

So what is a woman to do?
In short, a woman needs to educate herself about money matters, develop a long-term financial plan and then implement it. In the next issue of the Voice (watch the AACI blog for part II of this article), we will discuss in greater detail some financial planning tools that can help you take charge of your financial life.

Debbie Sassen is an independent Financial Planner and Licensed Investment Advisor (US) with the Investment Advisor Alliance, RIA. With over 25 years of experience in the financial services industry, Debbie uses her broad background to help people, in particular women, to organize their financial lives, identify their financial goals, and implement strategies to achieve financial freedom. She can be reached at Debbie.Sassen@yahoo.com or 054 842 7638.

Note: The above article is not, nor should it be a substitute for, financial advice relating to any individual’s specific needs.


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