Gender wealth gap hurts all

An editorial in the Baltimore Sun addressed the issue of the wealth gap between men and women. The editorial addresses some but not all of the issues that lead to this problem. As the editorial board stated: The wealth gap, a consequence of realities women face throughout their lives, leaves women experiencing financial hardship and distress at a disproportionately higher rate than men. Financial hardship is often a precursor to emotional distress and physical ailment, with cascading negative implications.

What is meant by the gender wealth gap? It refers to the difference in accumulated financial resources between men and women. 

Some of life’s difficulties that apply and hurt women more so than men are, divorce, single parenthood, caring for ageing parents or ill spouses, disability, and the inevitabilities of old age, and widowhood. Women who face these issues understand that each of them can wreak havoc, practical, economic, emotional and physical on their life and plan. 

Underlying the issues is the fact that women earn less and thus accumulate less wealth than men. This leads to a wealth gap that has the potential to and often does increase the devastation for women. 

Raising awareness that women earn less may catalyzing remedial action both individual action and action by policymakers. The burden of having women who are older living in poverty is not exclusively borne by the individual; it ripples through families and communities.

A recent study cited by Barron’s concluded that the lifetime gender wealth gap could translate to a difference of greater than $1 million in accumulated wealth. While the actual dollar amount will vary by individual and circumstance, the gender wealth gap exists across the socioeconomic spectrum.

One significant reason is that women earn less than men by about 20% for the same work. A 20% income differential, compounded over a lifetime, translates to significant accumulated wealth differential. While understanding all the causes of gender income disparity is essential before drawing conclusions about pay equity, we know that the gap exists and places many women at a financial disadvantage. Also, by choice or necessity, women assume the lion’s share of family caregiving, either staying home to raise children or interrupting careers to care for children, grandchildren, ageing parents and spouses. 

Less pay and intermittent work translate to less accumulated social security and fewer retirement savings and pension plans. And while nonworking spouses may be entitled to a portion of future Social Security and pension/retirement streams earned by working spouses, the sad reality is 40-50% of marriages in the U.S. end in divorce. 

Divorce can take a heavy financial toll on the finances of both spouses, but typically more on women who stayed home to raise children. Years out of the workforce likely means reentering at a lower salary level in the same industry or accepting any job to pay the bills. According to a report by the U.S. Government Accountability Office, women’s household income decreased by 41% post-divorce — almost twice the decline that men experience.

Women’s orientation around money is more likely to be focused on earnings and a living budget, and less likely to be focused on strategic financial planning and long-term investing. 

Finally, women in the U.S. live an average of five years longer than men. This “longevity factor” means assets must last for a longer time frame for women. It also means women are more likely to need long-term care (70% of nursing home residents are women).

This confluence of events — caregiving, systemic income disparity, societal realities, longevity — contributes to the gender wealth gap, with women experiencing some form of financial inequity in their lives in disproportionate numbers. In fact, women consistently name financial hardship as a major life concern, and in women over 50, fear of financial dependence is ranked a top fear. Many worry about outliving their savings or being a burden to loved ones in retirement. That fear causes anxiety, and it can compromise physical well-being.

We need to continue to fight for equal pay for women so that the women we work with and care for do not have the fear and anxiety they currently have.

When starting something new

As we move through the stages of retirement, it is, in my humble opinion, a good idea to try new things, listen to new ideas, try new adventures. Change is unsettling and frightening but after the initial adjustments change can be fun. To help adjust to change or to start the new adventure or beginning the new thing requires a change in attitude and a change in perception. 

As we get older it takes longer to learn new stuff, that is a reality for us, it does not mean we cannot learn, it just means it takes us longer to learn. The first step is to understand that you need to shake the burden that comes from seeing your baby steps, as a necessary discipline.

See these steps as a process of learning. Think of these needed steps in your progress as optional dance moves, in life's conga line or if you like life's new line dance. These baby steps are required now just as much as they were when we were learning to walk. 

Take some time and watch a toddler learning to walk, they are determined, excited and do not give up, no matter how many times they fall. Toddlers, I think at some level, understand the baby steps they are taking spark miracle, open floodgates, and lead to the near-effortless manifestations of change.

As we age, we need to hold on to the idea that we can learn that we had when we were toddlers and children. If we have lost it we need to find a way to rekindle that flame that allowed us to live a full, exciting and meaningful life. Just because we are in the final phase of life, does not mean that we should lose that spark that pushed us when we were young. There is so much to see and do and so little time to do it.

Are you afraid of the stock market?

The following is from an article called "Fear of a stock market crisis is preying on the 'pension freedom' generation living on their investments" by Tanya Jefferies for thisisMoney.co.uk

The cost of living, a stock market crisis and running out of money are dominant financial concerns among retired people, a new survey in Britain reveals.

The results of a study of retirement attitudes among mostly well-to-do savers reflect the major behavioural shift towards people investing their pensions to provide an income in old age, rather than depending on guaranteed payouts from an annuity or final salary pension.

Some 10,000 older people took part of a survey carried out by the Interactive Investor website (II), which probed their views on topics including wealth, inheritance and younger generations.

II says the study blows a hole in the cliched image of retirement that depicts a tanned, silver-haired, smiling couple on a golf course or cruise ship.

Two-thirds of the participants disagreed that retirement was a time of pleasure and financial worries loomed large in the findings.

Holidays and travel, and having more time for friends, family, hobbies and voluntary work, are all top priorities for both men and women – but there are some big secrets too, with half of the couples having no clue how much debt their partner has.

How to protect your retirement income plan in troubled times. The survey made the following findings.

Among retirees, 50 percent are concerned about the cost of living, 42 percent about a stock market crisis, 36 percent about affording healthcare, 35 percent about running out of money, and 24 percent about tax issues.

Meanwhile, for those yet to retire, the top financial concern was running out of money, with 26 percent worried about this, 23 percent about the rising cost of living, and 10 per cent about not being able to afford social care - with stock market hazards further down the list at 8 percent.

Leaving an inheritance was the top priority for 35 per cent overall, but 26 per cent had not written a will, while 25 per cent had one but admitted it needed reviewing.

Some 70 per cent of retired participants had not set up lasting power of attorney - an important legal step allowing loved ones to take over your finances if you fall ill - rising to 88 per cent among those not yet retired.

More than half of those surveyed did not know how much debt their partner had and almost a third didn't know how much they earned.

But that fitted with many running their finances at least partially apart, some 26 per cent of couples keep separate bank accounts, whilst 18 per cent have just a joint account and 56 per cent have a combination.

The report said that 17 per cent of women feel confident about maintaining their standard of living in retirement, compared with 30 per cent of men.

However, men are more than twice as likely as women to carry on working in retirement because they enjoy it (34 per cent versus 14 per cent), while women are twice as likely to stay in work due to financial necessity (41 per cent versus 20 per cent).

Dealing with financial issues was considered a chore by 34 per cent of women compared with 15 per cent of men.

Not starting a pension sooner was the biggest financial regret for 17 per cent of participants. And among those not yet retired, 32 per cent regret not saving enough more generally, and 12 per cent that they sat on too much cash instead of investing it.

Lifestyle goals: Having more time for friends and family is one of the priorities for retirement

When it comes to the generational divide, 51 per cent said younger generations have a tougher time financially than they did, and 29 per cent thought the opposite.

But 66 percent of those without a final salary pension - which provides a guaranteed income in old age - have a vague or no idea about what their income in retirement will be, compared with 44 percent of those who have one.

What does II recommend based on its findings?

The firm is calling on the Government to do the following.

•      Tackle inequality early with more dedicated, joined up and resourced financial education in schools.

•      Combat pension inequality throughout people's lives by introducing pension ‘wake up packs’ not just at 50, but at key life stages such as the start of a new job or birth of a child.

•      Get auto-enrolment working better for everyone by lowering the minimum age limit from 22 to 18 sooner rather than later, not the mid-2020s as currently planned. 

•      Change the qualification rules for the £10,000 auto-enrolment earnings threshold to cover people working for multiple employers, helping those - mostly women - who might have several part-time jobs.

Launch a public education campaign aimed at women to help kick start a savings and investment culture.

It is "Free" or so you thought

Have you ever been tempted to try a new product or service on a “free trial” The nation’s consumer protection agency, wants you to know that some companies use free trials to sign you up for more products – sometimes lots of products – which can cost you lots of money as they bill you every month until you cancel.

Or, the “free trial” might come with a tiny shipping and handling charge.  You think you’re only spending a few dollars, but you’re really giving up your credit card information, ending in much higher charges after the trial.

Other “free” plans enroll you in clubs or subscriptions.  For example, a company might offer you an introductory package of free books, CDs, magazines or movies. If you sign up, you may be agreeing to enroll in a club that will send you more products and bill you until you cancel, or to a subscription that’s automatically renewed each year.

So how can you avoid the costs that might be hiding in free trials?

•      Research the company online.  See what other people are saying about the company’s free trials – and its service. 

•      Find the terms and conditions for the offer. That includes offers online, on TV, in the newspaper, or on the radio.  If you can’t find them or can’t understand exactly what you’re agreeing to, don’t sign up.

•      Look for who’s behind the offer.  Just because you’re buying something online from one company doesn’t mean the offer or pop-up isn’t from someone else.

•      Watch out for pre-checked boxes.  If you sign up for a free trial online, look for already-checked boxes.  That checkmark may give the company the green light to continue the offer past the free trial or sign you up for more products – only this time you have to pay.

•      Mark your calendar.  Your free trial probably has a time limit. Once it passes without you telling the company to cancel your ‘order,” you may be on the hook for more products.

•      Look for info on how you can cancel future shipments or services. If you don’t want the, do you have to pay? Do you have a limited time to respond?

•      Read your credit and debit card statements. That way you’ll know right away if you’re being charged for something you didn’t order.

•      If you see charges you didn’t agree to, contact the company directly to sort out the situation.  If that doesn’t work, call your credit card company to dispute the charge. Ask the credit card company to reverse the charge because you didn’t actively order the additional merchandise.

Where to complain

If you’ve been wrongly charged for a free trial offer, report it to the FTC, your local or state consumer protection agency, and file a complaint with the Better Business Bureau.