Taking control of one’s financial life is important for all of us, but women face unique challenges. Whether you are single, partnered, parenting, or planning for your Fortune 500 retirement, there’s a lot to watch out for. By understanding the financial challenges most women from Fortune 500 face, you can be better equipped to avoid pitfalls and pursue the life you want.
Women are 24% more likely to permanently lose their jobs compared to men. [1]
Women's participation in the workforce is at 57% - the lowest it has been since 1988. [2]
Women hold 31% of senior management positions globally, while men hold 69%. [3]
Where men once dominated financial affairs, the growing presence of women in the workplace and as heads of households continues to be a paradigm shift. As women have taken more responsibility for their long-term goals and financial health, they have become a force to be reckoned with. This brings an array of unique financial needs. Women investors from Fortune 500 face special challenges that make financial literacy and advanced planning especially important. For example, women are more likely to outlive their husbands or have divorce disproportionally affect them, making long-term financial strategies especially critical.
We developed this guidebook as a resource for women employees of Fortune 500 who are seeking perspectives on how to take control of their financial lives. We encourage you to take notes as you read, and we hope you will find the information useful as you look to the years ahead.
What is your definition of a successful retirement from Fortune 500? Do you see yourself relaxing with friends and family? Or are you moving from one career to volunteering, running a small business, or some other personal endeavor? One of the things that can help your Fortune 500 retirement feel like success is forming an effective Fortune 500 retirement strategy. A conversation between you and a trusted financial professional can help you examine the challenges ahead and form your strategy.
While every woman and every family is different, research shows that American women face many of the following challenges:
Women continue to be underrepresented in the fields of science, technology, engineering and mathematics, representing only 35% of the world's STEM graduates
Source: “The World's Women 2020: Trends and Statistics.” United Nations [5]
Based on research about life expectancies, on average, women outlive men. Losing a spouse is heart-wrenching, and in a family where the husband manages the finances, a widow might need to quickly take control of family accounts. Without a strategy, this transition can worsen an already stressful situation and lead to costly errors. We can prepare for this eventuality by ensuring that every adult in the household is involved in managing family finances. However, a UBS study shows us that 7 in 10 men and nearly half of the women said the husband takes responsibility for long-term financial decisions. [6]
According to a few reports:
Only 41% of women were able to continue saving for retirement during the pandemic. [7]
68% of women feel very or somewhat confident in their ability to live comfortably through retirement, vs. men at 76%. [8]
In the bigger picture, it becomes clear that regardless of whether you are partnered or single, it’s important for you to take an active role in your Fortune 500 retirement strategy. The key is to start the conversation and remain involved.
The gender gap
While there are many contributing factors, smaller paychecks and more time out of the workforce are two major causes of this disparity. There are a number of important life decisions that each of us makes; these decisions can affect your income and, consequently, your Fortune 500 retirement. Census data shows that despite the important strides women have made in the workplace, women’s median annual income for full-time employment is still only 82% of men’s — a difference that can add up to a lifetime loss of hundreds of thousands of dollars.[9]
Research also shows that women are more likely than men to be caregivers to their parents, children, and other relatives. While this is often an urgent and necessary decision for their family, it has the consequence of reducing their time in the workforce and their income. Increased time out of the workforce results in lower lifetime earnings, less retirement savings, and less pension savings, compared to their male counterparts. In fact, between February 2020 and February 2021, more than 2.3 million women in the U.S. left the labor force. This mass exit was linked to the closure of day-care centers and schools, causing millions of women to be burdened by both work and child-care responsibilities.[10] These factors contribute to the earnings and savings gap between men and women, and, as a woman working with Fortune 500 this can affect your financial well-being in your retirement from Fortune 500.
Women are assumed to be more conservative with risks and need to be coaxed into understanding finance. Research shows that this stereotype is wrong. Women spend more time researching their investment choices and while they do take on less risk when it comes to investing, that doesn't mean they are risk averse. Rather, they are more likely to take on appropriate levels of risk with their investments than men, leading to better-investing outcomes. [11]
This prevents women from listening to news headlines and chasing 'hot' tips, behavior that tends to weaken men's portfolios. Women also stay calmer than men during market turndowns which protects them from locking in losses.
Source: “Caregiving in the U.S.” National Alliance for Caregiving and AARP, 2020.
Studies show that men trade 45% more often than women do, and although men are more confident investors, they tend to be overconfident. By trading more often, and without enough research, men reduce their net returns. This doesn't just lead to poorer investment choices, but this trading may also result in extra commissions and higher taxes on their investments.[11]
Women investors outperform male investors by an average of 40 basis points, or 0.4 percent, which can add up to huge losses over an investing lifetime.
Source: “Why Women Are Better Investors.” Forbes, 2021.
The Burdens of Divorce Fall Disproportionately on Women
Divorce is painful, but switching from a dual-income to a single-income household brings additional challenges for women. Generally, women suffer more financially than men do from divorce. The financial burden is greatest during the first year after and varies depending on (1) how much money the woman contributed to the family income before divorce, and (2) the ability and willingness of her former husband to make child support payments. In addition, divorced women may become solely responsible for their future earnings, savings, and retirement strategy, and they are much more likely to be the sole custodial parent; fathers account for only 1 in 5 custodial parents (19.6%).[12] As many women have found, there is life after a divorce; however, it is critical to anticipate and plan for its potential effects on their savings and retirement goals. There is no doubt many women face unique obstacles to growing their wealth. Having a realistic perspective on your financial needs and proper planning can help you overcome these challenges and build a long-term strategy.
Women older than 50 see their incomes drop an average of 41% after a divorce.
Men older than 50 see their incomes drop an average of 23% after a divorce
Couples older than 50 are twice as likely to divorce today compared to their counterparts in 1990.
Source: “Divorce in Mid-Life: Fresh Starts, New Financial Challenges for Women.” Merrill: A Bank of America Company, 2020.
Managing Change During Life’s Transitions
In every life, some rain must fall. Do you already know how to handle a difficult transition in your home life? Strategizing for the future and your retirement from Fortune 500 is one of the most important aspects of your financial life. The time will come when you’re facing important decisions. You want to make certain that, should difficulties arrive, you’re an active part of the conversation. While you might not be able to get ahead of every situation you face, it’s important to be confident that you can handle it on your own. That means that, if you are married or have a partner, you both know how to navigate these rough waters on your own, if necessary. Engage your spouse, partner, or other family members in regular discussions. This way, everyone is kept informed of important financial plans and future goals. These discussions don’t have to revolve around worst-case scenarios.
The challenges are real, but you don’t have to be daunted by the statistics. Avoid doom and gloom projections by focusing on your future goals. What do you want for your Fortune 500 retirement? What are your dreams and hopes? Including your family members in these conversations can help foster financial wellness for generations to come.
Survey: Bank of America
Source: “Survey: A Year Into the Pandemic, Long-Term Financial Impact Weighs Heavily on Many Americans.” Paw Research Center, 2021.
#1: Not Planning for Longer Life Expectancy
As we have shared, women generally live longer than men. For that reason in particular, women should consider using investment strategies that balance a sustainable withdrawal rate with the right measure of risk, and consider inflation. Balancing these factors may help you have the income you need for the rest of your life.
#2: Failing to Plan for Healthcare Expenses
Because women have a longer life expectancy, long-term care can become expensive for them. According to a National Center for Assisted Living report, the yearly average cost of assisted living was $51,600. Assisted living communities and independent living communities generally have a monthly cost that could range from $2,000 to $7,000 and may provide other healthcare services for an additional monthly fee. These costs are just a snapshot of key retirement healthcare expenses.[13] Considering their high costs and unpredictable nature, healthcare projections should be a part of your long-term financial strategies. Major medical expenses can easily wipe out your Fortune 500 retirement savings, but there are many strategies to help avoid outliving your money. With our assistance, you can make plans to help ensure you are able to address any medical needs without adversely affecting your retirement lifestyle.
#3: Making Decisions Out of Fear
Both men and women can be tempted to make drastic money moves in troubled times. A good strategy, however, takes good times and bad into account. When markets swing, a careless reaction can wreak havoc on even the most carefully designed investment plan. Many investors, both men and women, lost money in the mortgage meltdown of 2008. Some even cashed out near the bottom, fearing the markets themselves were collapsing. Not only did these investors lose money by selling low, but if their money is still sitting on the sidelines, then they’ve missed out on the financial recovery as well. When major investment decisions are only a click away, many investors give in to their fears or exuberance, and they could pay the price for this short-term thinking. A recent study showed that 58% of investors agreed their portfolio performs better when emotions are left out of the equation. Yet 47% said it was difficult to keep emotions at ease.[14] The result is buying, selling, and remorse. Two-thirds of respondents reported they regret letting emotions drive their investment decisions. The most likely to make these impulsive moves are Gen Zers (85%) and millennials (73%).[14]
#4: Not Getting Professional Help
Receiving advisory support from a professional can be a valuable tool as it may guide you toward decisions regarding your Fortune 500 retirement planning goals. Unfortunately, many people may put off key financial decisions, sometimes for years. This decision, however, could be direly affecting their potential to replace as much income as they need for retirement. According to two studies in 2021, 61% of women use a financial advisor, while only 56% of men use an advisor.[15] Everyone can benefit from receiving professional guidance. Advisors can give you a game plan that puts you on track to receive your financial goals. Having access to the professional insight and resources you need to guide you in your financial life, and support long-term strategies can make a big difference in your ability to retire from Fortune 500 your way. As financial representatives, we spend our careers charting courses through turbulent markets, and it’s our job to stay on top of ever-shifting economic, financial, and legal issues. By making time to create financial strategies and choosing to have guidance from professionals, women can more effectively overcome the odds stacked against them.
One of the rewards for hard work and effective wealth management is the joy of providing for your loved ones and the causes you care about. In our business, we have found that, as individuals and couples move into retirement, they begin to think more practically about the legacies they want to leave behind. With women commonly outliving their spouses, they are increasingly responsible for the final disposition of family assets. As a result, it is important to discuss in advance your family’s estate-planning goals.
Women now own more than 50% of America’s wealth. And they are the primary breadwinners in more than 40% of U.S. households.
Source: “5 Facts About Women and Money for International Women’s Day.” Chime, 2020.
One of the greatest gifts you can leave your family is a life well lived — one full of love that serves as an example to others. While you take steps toward controlling your financial destiny, remember that the women in your life will look to you for support in their financial lives. As part of your legacy, you can pass down the awareness of a woman’s need for building financial wellness throughout life. By setting this example and building a legacy that reflects your values, you can focus on leaving the world and the people you care about a little better than when you got here.
We hope you have found this guide informative and educational. If there’s one thing we hope you take with you from this report, it’s that now is the time for you to examine your financial future. You can start by having a conversation with your spouse or family. Further, continue having conversations and learning about wealth management, financial strategies, and investing.
We also want to offer ourselves as a resource to you and your family. We are happy to answer questions about your current financial situation and future goals. We provide complimentary consultations at any time. Should you have any questions about what you have read here and what it means for your future, please reach out. We are ready to help you build the financial life you envision.
The Retirement Group is a nationwide group of financial advisors who work together as a team.
We focus entirely on retirement planning and the design of retirement portfolios for transitioning corporate employees. Each representative of the group has been hand-selected by The Retirement Group in select cities of the United States. Each advisor was selected based on their pension expertise, experience in financial planning, and portfolio construction knowledge.
TRG takes a teamwork approach in providing the best possible solutions for our client's concerns. The Team has a conservative investment philosophy and diversifies client portfolios with laddered bonds, CDs, mutual funds, ETFs, Annuities, Stocks and other investments to help achieve their goals. The team addresses Retirement, Pension, Tax, Asset Allocation, Estate, and Elder Care issues. This document utilizes various research tools and techniques. A variety of assumptions and judgmental elements are inevitably inherent in any attempt to estimate future results and, consequently, such results should be viewed as tentative estimations. Changes in the law, investment climate, interest rates, and personal circumstances will have profound effects on both the accuracy of our estimations and the suitability of our recommendations. The need for ongoing sensitivity to change and for constant re-examination and alteration of the plan is thus apparent.
Therefore, we encourage you to have your plan updated a few months before your potential retirement date as well as an annual review. It should be emphasized that neither The Retirement Group, LLC nor any of its employees can engage in the practice of law or accounting and that nothing in this document should be taken as an effort to do so. We look forward to working with tax and/or legal professionals you may select to discuss the relevant ramifications of our recommendations.
Throughout your retirement years, we will continue to update you on issues affecting your retirement through our complimentary and proprietary newsletters, workshops, and regular updates. You may always reach us at (800) 900-5867.
Fischer, Michael. "Men Still Make the Financial Decisions in Most Couples: UBS." ThinkAdvisor, May 10, 2021
Leonhardt, Megan. "58% of men were able to continue saving for retirement during the pandemic - but only 41% of women were." CNBC, June 16, 2021
EBRI. "Gender and Martial Status Comparison Among Workers." Retirement Confidence Survey (RSC), 2021
Raedle, Joe. "It's 2021 and women STILL make 82 cents for every dollar earned by a man." NBCNews, March 23, 2021
Connley, Courtney. "In 1 year, women globally lost $800 billion in income due to Covid-19, new report finds." CNBC, April 30, 2021
Curry, Benjamin. "Why Women Are Better Investors." Forbes, March 30, 2021
Lazic, Marija. "35 Divisive Child Custody Statistics." Legal jobs, June 21, 2021
NCAL. "Facts and Figures." National Center for Assisted Living, 2020
Fox, Michelle. "Two-thirds of investors regret emotional, impulsive investing decisions. Here's how to not be one of them." CNBC, August 11, 2021
Franklin, Mary Beth. "Women rely on financial advisors more than men." InvestmentNews, February 18, 2021
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