Dialogue about the implications of the inevitable retirement of 78 million Baby Boomers beginning in 2008 is everywhere: newspapers, television and the Internet. A recent article pointed out that of these soon-to-be retirees, it is in fact women that may face the most uncertainty.
Further supporting this claim, a recent collaborative study led by Harvard Generations Policy Program and the Global Generations Policy Institute indicates that millions of Boomer women will face uncertain futures because of gender-biased public and private-sector policies. For example, social security and pension plans were not as effective for women who took time away from employment to care for their children. Boomer women are also significantly more likely to be divorced or never married than previous generations, and are relying too much on their home equity to carry them through retirement.
In addition, women collectively earn less than men and therefore also save less. Many women go into professions that are more socially conscious but pay less. These professions, such as teachers, nurses, counselors, etc., are important for our society but rarely deemed worthy of large salaries. For instance, according to Salary.com, the median expected salary in the female-dominated teaching profession is $47,342 compared to the salary of $166,598 in the male-dominated medical field. Consequently, even if women worked through their child bearing years, they most likely would not be financially secure.
We can’t erase biases and we can’t count on policy changes. Financial advisors can help educate and provide clients with the tools they need to take control of their own financial futures so this looming crisis will not become a harsh reality.
As financial advisors, I encourage you to fully understand the unique retirement needs of your female Boomer-aged clients so that you’re better able to help them prepare for retirement.
