Women & Wealth: Expect the Unexpected

The time is now to take control of your finances.

A life-changing event will not wait until we are prepared.

Women have long faced unique challenges compared to those faced by men. Job loss, health issues, financial responsibilities for relatives – these challenges are gender-agnostic. Yet study after study and countless personal experiences tell the same story: women suffer disproportionately from unexpected events, and even more so in periods of economic downturn.

Yes, economic opportunities have improved in recent years for women. Yet, as the COVID-19 pandemic exposed in devastating ways, long-standing issues continue to cause setbacks for women. Existing challenges have been magnified by the global crisis, creating unsustainable pressure and forcing difficult choices.

During the pandemic, millions of women were forced out of the workforce due to layoffs and increased caregiving demands, with many women of color sustaining the greatest economic losses.¹ Not to mention, more women were laid-off or furloughed compared to men.²

These setbacks can cost years of progress for women professionally and financially, threatening long-term financial security and independence.

A bold and adaptable financial plan is critical as the foundation to rebuild, pivot, or recover from a distressing event.

It’s important to understand the key factors that help explain why women are at greater risk of forfeiting financial security when dealt an unexpected change:

LONGER LIFE EXPECTANCIES

It is especially important for women to account for their lifespan in planning for their financial future. Even a couple of additional years carry large implications on expenses, including health care and long-term assistance. For those living with a long-term partner or family member, there are additional impacts of shouldering a greater portion of housework and physically caring for someone else.

For many women, realistically assessing the likelihood of longevity and the associated physical, financial, and emotional costs can be the difference between living on your own terms or in dependency.

PERSISTENT PAY GAP AND CAREER INTERRUPTION

In 2023, women earned 83.6% of what men earned, for median weekly earnings of full-time wage and salary workers.³ This has further implications including lower Social Security benefits and slower debt payment. The improvement to women’s earnings ratio varies greatly by race, with Black and Latina women remaining at the same gap rate for the past 30 years with no improvement when they attain higher education.⁴

SOLO LIVING

In 2019, roughly 38% of adults aged 25-54 were unpartnered – neither married, nor living with a partner (increase from 29% in 1990).⁵ Additionally, as Baby Boomers enter retirement, their divorce rate is creeping up. Adults aged 55-64 have a divorce rate of 46% and adults aged 65-74 have a divorce rate of 24%.⁶ “Gray divorce” is particularly problematic for women, who are far more likely to face economic insecurity. Women experienced a 45% decline in their living standards after a gray divorce, with living standards defined by comparing income to needs. By contrast, men experienced just a 21% decline.⁷ Whether by divorce or death, women are far more likely to find themselves suddenly single, and at a disadvantage.

UNDERSERVED BY FINANCIAL INSTITUTIONS

In 2022, about 33% of the world’s wealth was held by women and $30 TN of wealth is expected to be transferred to U.S. women in the next decade. Women aged 50-70 have more money, independence, and opportunity than previous generations – and women coming after them are likely to have even more.⁸ Women may have better opportunities than ever before to grow and accumulate wealth. However, possessing money today does not guarantee lasting wealth and financial security. Access to resources, education, and advisors is the beginning of a reliable financial foundation, and these very building blocks have not been available to women in the same way they have been for men.

Everyone should have a financial plan, but the urgency for women and the impact it will have cannot be overstated.

OUR PLANNING APPROACH

While we cannot predict and prevent all the possible changes you will face, we draw upon our deep expertise and decades of experience to equip you with a financial plan that is honest, resilient, adaptable, and most importantly, wholly yours.

1. Understand Your Financial Picture

We review your current financial picture with you to establish a starting point and understand your priorities. We have tools that can help with this, including a full questionnaire, a financial planning checklist to identify strengths and gaps, and a budget worksheet to assess your spending needs.

2. Develop Your Plan

Once we understand your current situation and your objectives, we can work together on developing a plan. This is a partnership where we establish your “baseline” scenario, or a projection if you stay the current course.

From here, we work together to identify ways to make the plan more solid and durable across a wide range of possibilities. We look for vulnerabilities in the plan that can be shored up to lower the chance of future surprises.

Alternate scenarios provide insight to the impact of decisions, from big life decisions to small adjustments such as moving to a different state, retiring earlier or later, donating to charity over your lifetime or in your estate planning.

3. Monitor and Adapt

Once you have a financial plan in place, keeping it up-to-date is key. We will review the assumptions in your plan on an ongoing basis to ensure it remains relevant. The good news is having the framework in place helps tremendously if the unexpected happens. You do not have to start from scratch—you already have a framework.

A STARTING POINT

Thoughtful planning and preparation is our best guard against the unexpected, and could be the difference between a temporary setback and long-lasting financial damage.

The checklist below can help you get started if you are facing changes, or serve as a general financial health check-up.

Take charge of your finances and your future.

Our Transitions Checklist serves as a starting point for a more comprehensive review of your financial situation. Please use additional 1919 tools to help you in your financial planning journey:

• Financial Planning Questionnaire
• Personal Budget Worksheet

At 1919 Investment Counsel, we serve our clients by listening, learning, and responding to their needs. This enables us to develop practical, actionable plans in collaboration with our clients. We are committed to listening before we prescribe and apply our deep expertise to help our clients plan for their future and navigate difficult times.

Take control of your financial future, before the unexpected occurs.

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