COVID-19 Shines a Light on the Challenges Women Disproportionately Face

COVID-19 has shone a light on the reliance our society has on women, from the front line to the home, exposing inequalities across health, the economy, and social protection.

More than half of the U.S population is represented by women; they are one of America’s most powerful economic forces.

Women control more than half of the investment wealth in the United States; they represent more than 40 percent of all Americans with gross investable assets above $600,000 and 60% of high-net-worth women having earned their own wealth.

Consequently, 45% of American millionaires are women with 48% of estates worth more than $5 million controlled by women, compared with 35% controlled by men.

The Baby-Boomer market is quickly becoming the American Silver Tsunami, with 76 million babies born between 1946 – 1964, 40% of the population in 1964.

Just as these people were born within 18 years of each other, they will retire within 18 years of each other.

Women of this American Silver Tsunami are expected to receive an “echo” inheritance.

Many will inherit when one or more of their parents pass away, then they will receive another inheritance when their spouse leaves them a widow.

Some will even inherit from their in-laws when their husband passes away.

In 1950 about one in three women worked full-time outside the home, the balance was “domestic engineers”, managing the home, and raising the family.

In 2019 some 72 % of women, more than twice as many as in 1950, are full-time employees somewhere.

It is estimated that 2/3 of family’s today depend on two incomes.

Moreover, only 25% of U.S. households today represent the “traditional” nuclear family with more than two out of three mothers with children under the age of six now working outside the home.

According to the U.S. Census Bureau in 2019, at least half of all wives earned as much or more than their husbands, with 38% earning more.

Sure, women are holding jobs, but they're making bank, too: The number of women earning $60,000 a year or more rose from 2% to 13% (2015 data), while 41% of men, up from 25%, are moving to lower tax brackets.?

From ages 22 to 32, the pay for female college graduates grows slightly faster than it does for men.

However, a shift occurs at age 33, when women’s earnings growth starts to slow, and men’s remains steady.

By age 40, professional women see their salaries peak at about $67,000.

Challenges Advisors Can Address with Women

So, what are some of the formidable challenges women face in the coming years?

1.?????Divorce: In the 2018 Worthy study “Building a Financial Fresh Start” some 22% of the women surveyed were 55 or older; most of those were already divorced. ?

Three nasty surprises divorced women encounter are:?

a.?????Unaware of marital debt

b.?????Assuming child support and/or alimony would be higher or last longer

c.??????Staggering cost of health care insurance?

2.?????Widow: The household income for widows typically declines 37 percent after a spouse dies, far more than the 22 percent income drop that men experience, according to government figures. ?

The assets of widows also tend to fall substantially more than widowers.

Women who were unclear about family finances have an opportunity to learn about the family finances at least once a year — at tax time — when they sign the return.?

3.?????Poverty: – many women find themselves in financial jeopardy in later life. ?

Nearly three out of four Americans living in poverty over 65 are women, and older women living alone are more than twice as likely to be impoverished as are men. ?

After decades of inadequate preparation for retirement, the Baby Boomer generation of women faces the biggest risk of poverty.

In 2018 there were 3.47 million widowed men and 11.41 widowed women.

This demographic is growing by 1 million per year.

Women need to know where things are:

a.??????life insurance policies,

b.?????safe deposit boxes and keys,

c.??????investment accounts —

d.?????all of it.

This fast-growing market segment is expected to control trillions of dollars in assets in the next 30 years

Understanding these stages of widowhood can eliminate downturns for advisors, capture lost income, and help them dominate their local market.

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