5 Life Changes Facing Women

Oh mirror in the sky
What is love
Can the child within my heart rise above
Can I sail through the changing ocean tides
Can I handle the seasons of my life…
- “Landslide” by Stevie Nicks

While we commonly think of stock and bond performance as yardsticks of investing success, women are inclined to focus on more personal measures in evaluating success.  Quarter-to-quarter market performance is of less interest to us than knowing that we are on track to meet our life objectives.

Can we send our children to the schools of their choice?

Will we be able to retire comfortably?

Will we be OK if our husband dies first?

We seek confidence in our financial ability to take care of those and that which we care so deeply about– our family’s health, our spouse and self in older age, our children and grandchildren today, our aging parents tomorrow, our retirement dreams and on and on.

Family Wealth Advisors Council Study was commissioned to learn how the wealth management industry can better serve the unique needs of women investors.  The 2011 study indicates that women’s anxieties are greatly heightened when they experience major life transitions that have a resounding effect on financial well-being.

Five major life transitions emerged as being of serious concern for women and their finances.  They are death of a spouse, divorce, career change, retirement, and the pressures of being in the “sandwich generation.”

How can women prepare for and face these major transitions with greater confidence and far less anxiety?

In the coming weeks, well explore each in more depth.  Here is a preview:

1 – Widow – Nearly 700,000 women lose their husbands each year and of those it is estimated that 70% will change their financial advisor within a year of their spouse’s death due to dissatisfaction.  So in the midst of grieving, a majority of widows feel compelled to change a primary advisor.

What is wrong with this picture?

A married woman is well served to get to know her family’s financial advisor well, and if she cannot envision a respectful and trusting relationship with that advisor in the absence of her spouse, this is a serious signal to consider engaging another advisor today that both she and her husband like.  Widows outlive their husbands by 14 years on average so having the right relationship today is key.

2 – Divorce – Divorce poses a significant risk to the financial future of many married women.  The risk is estimated to be 50%.  In the middle of the emotional whirlwind of divorce a woman commonly focuses on “Am I going to be OK?” and “Do I have enough money to live on?”  Being empowered with knowledge today can alleviate some of the stress of divorce.  Are you familiar with your family’s total financial picture including assets, liabilities, and income sources?  Are you aware of how assets and liabilities are titled?  Do you communicate openly and regularly with your husband about financial matters.  Do you join your husband in meetings with your financial advisor?

Knowledge is power and can arm you well for the uncertain future.

3 Career Change – According to the survey, career women have concerns about the effect of undesirable and unexpected career change on their financial success.  Given their limited time and the demands of career management, career women can reduce stress in their life by engaging a financial advisor who provides guidance on career/business planning, company benefit plans, 401(k) and 403(b) plans, life insurance, deferred compensation, and stock options.  Increased value comes from an advisor who has the capability to review and assess your total financial assets, not just those under their management.

4 Retirement – As we move into retirement, our needs from a financial advisor will change. Comfort and security become paramount.  We need the confidence that we have a sound financial plan outlining how our resources will support us into the future.  We want a collaborative team cheering us on. Ideally, this is led by our financial advisor who then coordinates our other advisors like an attorney, accountant and insurance agent.  Expenses require closer scrutiny.  How does our financial advisor charge fees?  Are our investments managed in a tax efficient manner?  Answers to these questions will help alleviate anxiety and create comfort in retirement.

5 – Sandwich generation –Women are traditional caregivers and by age 50 can find themselves providing financial and emotional support to their parents and children simultaneously. This is estimated to cost an average of $324,000 in lost wages and Social Security benefits over a career.  A financial advisor who is attuned to this special circumstance and understands its impact, not just on a woman’s finances, but on her total life picture, is best equipped to help navigate this life passage. Knowledge of specific resources like long-term care insurance and 529 college savings plans as well as an ability to listen well and ultimately coach are some of the specialized skills an effective financial advisor can provide to a woman facing these unique pressures.