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Women and Money

Women and Money

It is a fact of life that women face a higher level of financial risk during their lifetime than men. There are differences between men and women with regard to lifespan, lifestyles, income and attitudes which can have a negative effect on a woman’s financial position.

 Women live around 5-7 years longer than men on average and tend to marry men older than themselves. They are therefore much more likely to be living on their own in retirement than men. Living costs for a single person are more than half the living costs of a couple and so women are more likely to be living in poverty in retirement.

 During their working lives, women earn on average significantly less than men and it is therefore harder for single women to save for unexpected expenses, their financial goals, or retirement. Many relationships today end in separation or divorce, often leaving women with a lower standard of living and a high economic burden. Women’s careers are more likely to be interrupted by child rearing or caring for elderly parents. It has been said that for every year a woman stays home to look after a child, she must work five extra years to recover lost income, retirement savings and career promotions.

 Anecdotally, as the baby boomers are moving into their fifties and sixties, there is a growing number of women who left school in an era when career and income expectations for women were low, who have been through a relationship breakdown and perhaps a redundancy and who are about to enter retirement living in rental accommodation or with a mortgage and no savings. Women need to take steps to avoid ending their lives in poverty and should not rely on some Prince Charming or the Government to take care of them.


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Financial Advice for Women

What Women Want

A survey undertaken in the USA in 2010 by Ameriprise, a financial services company, found some interesting differences between men and women when it comes to getting financial advice. To begin with, women are much more likely to seek financial advice than men (46% vs 38%). When asked about the importance of specific attributes of advice, there were clear differences between men and women. Women place a much higher importance on having an adviser who takes time to educate them, with 63% rating this attribute as extremely or very important compared with 52% of men. They also seek an adviser who provides a knowledgeable point of view (69% for women vs 52% for men) and who coaches them on what they need to do to achieve their retirement goals (58% vs 43%).

During their pre-retirement years, more women than men put high importance on planning to be able to volunteer (31% vs 22%) and spend time with family (77% vs 68%) in retirement. These differences continue through to how they spend their time in retirement. Men, on the other hand, place more importance while in their pre-retirement years on planning how to spend more time resting and relaxing (38% vs 32%) and deciding on hobbies to pursue (33%vs 21%), yet in retirement they are much more likely to continue to work (17% vs 6%).

One of the most surprising findings of the survey is that both women and men give almost equal importance to an adviser’s ability to understand what is important to them as to the adviser’s ability to produce competitive returns on their money.

In summary, while women tend to have more concerns about their financial future, they are also more likely to use a financial adviser and to make plans for an active lifestyle in retirement.

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