For many women, planning for the financial side of retirement falls to the very bottom of their priority list. Not even ironing or cleaning up after a big Thanksgiving dinner is lower on the list. But ignoring the realities of planning for retirement doesn’t make the problem go away, and can often make it so much worse.
Those of us in the retirement planning world are often frustrated that more women aren’t taking control of more of their assets. It’s hard to explain to these women exactly why it is so very important to be learning along the way, and not just coming into the world of finance when a disaster strikes. It is not uncommon for a woman to tell me, “I just don’t want to deal with all of this money stuff. That’s my husband’s job and he is very good at it.”
A few of us are working on identifying and articulating why women are often sitting on the sidelines with their money. I wrote an article that starts to unravel this dilemma in a recent edition of Retirement Weekly, a MarketWatch premium newsletter published by Dow Jones & Co. I worked closely with a colleague and friend of mine, Craig Adamson. He is an advisor in Iowa who is working with a lot of women to help them take the reins of their retirement finances.
You can read the full article (below) as it appeared in the June 16, 2017 edition, or you can link directly to the Retirement Weekly article online. Retirement Weekly is a subscription-based newsletter, chocked full of terrific, timely retirement information, in-depth discussions about retirement rules, and coverage of the most current topics impacting retirement savings and plans. There is something for everyone and at every stage in the retirement cycle. You can find the free-trial and subscription information here.
Take a read and do let me know what you think!
(Reprinted with permission from Retirement Weekly ©2017)
Overcoming “Ladies’ Liabilities” in Retirement Planning
5 common liabilities holding women back financially and 5 steps to conquer them
By Marcia Mantell
Let’s face it ladies, we are busy. Not regular busy, but super busy. All day, every day, and for years and years on end. You’ve heard that women are the ultimate multi-taskers or that popular piece of advice, “If you need something done, just give it to a busy woman.” Somehow, some way, women always get their multiple jobs done. Yet, it comes with a price.
It’s wildly challenging to juggle these many roles, jobs, and tasks and be successful all the time. We often feel we haven’t done the best in all of our many roles. It’s not always satisfying to be the only one who can make dinner, sew on a button, kiss a skinned knee while planning the family reunion with color-coded t-shirts for each different sibling’s offspring, running a company, and also being the goddess your partner is looking for.
Some of the most important advice a woman can get is to put herself first on the priority pole. If she doesn’t take good care of herself, she can’t care for everyone else. That advice is usually teed up when looking for solutions around stress relief or fitting in fitness, eating better, or staying healthy. It is good advice. However, it misses the mark when it comes to personal financial well-being. And, it really misses the mark for long-term retirement planning.
Time Confetti and Morse Code
Being busy is a reality for women. Most women would agree that lack of time is our biggest liability and our number one reason for not being more financially savvy. It’s hard to explain how busy our days truly are. One description comes from Brigid Schulte, the author of the New York Times bestselling book on time pressure, Overwhelmed: Work, Love & Play when No One has the Time. Schulte is an award-winning writer, journalist, and director of The Better Life Lab and Good Life Initiative at New America, a nonpartisan think tank in Washington, DC. Her latest book, available on Amazon and other retailers, is about modern life and the true lack of time for women.
Schulte calls the few minutes between one activity and the next “time confetti”. You can almost picture brightly colored, sparkling confetti raining down all over your kitchen. These are the little snippets of time that a woman might grab for herself between tasks; and, they represent the hope of more sparkle to come later. But, then again, there’s a mess of confetti all over the floor that needs to be vacuumed. Who’s going to do that and when? Hmmm.
The Bureau of Labor Statistics (BLS) tracks the time we spend throughout the day in its American Time Use Survey, and it’s always fascinating to see how men and women spend their “average” days. Virtually everyone sleeps and eats…and spends time in the category called “leisure and sports”. According to this study that interviews over 10,000 Americans keeping a daily diary of activities specifically for this research, nearly 96% of women participate in leisure activities such as socializing, exercising or watching TV each day. That’s not hard to believe. Falling asleep in front of the TV at 10:00 p.m. seems to be a common activity.
What is surprising is that the data show that women spend nearly six (6) hours a day doing these “leisure” activities! By the BLS definition, these activities would include managing your son’s soccer league, watching your daughter’s marching band competition, and setting up a Facebook group to bring meals to a neighbor who is ill. Perhaps it is helpful to remember that “leisure” has multiple meanings, particularly for the ladies.
For years, I’ve tried to describe why I’m always so tired and never feel that I have my definition of leisure time. Much like the visual of “confetti” time, I think of my days more like the dots and dashes or dits and dahs of Morse Code and the telegraph. There are longer dashes interrupted by shorter dots all day long. You’re working on one project only to be interrupted by someone else in need of your time and attention. Each day is a new test of your flexibility, your juggling skills, and patience. It’s particularly difficult when your children are young and under foot. Once a mother, always a mother! And, the many interruptions don’t go away when the children leave the nest for college or work. There might be more time between the dits and dahs as your children grow up, but when they do call, the time to help them takes much longer. Long dash, long dash, dot, dot, dot…
How well women wrestle their time, organize their days, and complete tasks is exhausting and relentless, but it is the key to gaining some ground and mind-space to be able to focus on their important long-term futures. Recognizing and acknowledging that time is always going to be a woman’s most difficult challenge, it is of utmost importance to carve out dedicated space to make sure your financial outlook and retirement is on track.
5 Liabilities Holding Women Back Financially
Craig Adamson, a financial advisor in Marion, Iowa, has found working with women to be quite rewarding. He’s been particularly effective in helping single, married, and divorced women, as well as widows overcome their very real liabilities and concerns. None of the women he works with feels they have much time to spend on financial and retirement planning, so he makes sure they feel time with him is well spent. He knows they could have skipped the meeting and surely they had something else they could have been doing. But, he helps them stay focused and realize that their financial situation is as important as everything else they are doing for their families, themselves and their careers.
“One of the most important parts of my job is to listen to my clients. I need to hear what they are saying, but more importantly, what they aren’t telling me. It’s not uncommon for clients to want to hide what they don’t know,” Adamson comments about one of the keys he’s found to working with women. “Once women know they can trust you, because you aren’t judging them, the conversations are much more real and honest,” notes Adamson.
He agrees that the following are often the top issues that make it hard for women to get ready for their retirement:
1) Becoming a Bag Lady. Every couple of months another survey comes out stating that women’s biggest fear is running out of money in retirement. This has been the case for 20 or more years. It’s not necessarily rational or logical, but it is a fear. It’s an anxiety that nags at women, yet few look this fear in the face and do something about it. It’s a liability that we simply cannot keep hanging on to. The solution takes a long time to put in place; namely, more savings for retirement. “Rather than being fearful, which can lead to doing nothing, ladies need to stop for a brief time and take specific financial actions to conquer this fear,” advises Adamson.
2) Lying and denying. Women are especially adroit at pushing aside those pesky things they don’t want to do or are uncomfortable doing. They like to be right and strive for perfection. So if something is going to derail a woman, she’ll tell a little white lie or deny the discomfort. Unfortunately, when it comes to money and investing, it’s important to admit what you don’t know. More important is to take steps to get your questions answered. Never settle for having “an expert” talk AT you rather than TO you. Get comfortable asking as many questions as you want until you understand the implications of the information on your life. Learn to trust the advice you are hiring.
3) Planning for a dozen “Plan B’s”. The practical reality is that women have many plan A’s and a host of “what if” plan B’s. She’s hailed as the queen of all answers, options and situations:
- Will mom and dad age at home or move in with me or with my siblings? Will other relatives take them in? Will they go to a retirement community?
- Will my son/daughter move back home with me or settle into his or her own place?
- What if my spouse or partner keeps working until 70 or 75? What if he or she retires sooner than planned?
- What if my spouse or partner gets sick? Will he or she be able to be cared for at home? Will we have to hire help? Will we need to consider a nursing home?
- What if my grandchildren need support from us – babysitting, financial aid? Will we have room if they need to move in with us? Will we have the money?
Women tend to think about the larger family unit and what each person in the family may need at some point in time. While that is kind, considerate, and caring, she also needs to remember to have a Plan B for herself. That’s where the problems and complexities come in. Most women will end up alone and responsible for their own finances at some point in retirement. A wife typically lives longer than a husband so she is left facing higher health costs and living expenses toward the end of her life.
4) Talking about everything but money. Women are highly social and enjoy being in community settings. They work well together (many hands make light work) and talk about some of their most personal situations (marriage, mothers, and menopause). But, one topic that is still taboo: money. Women generally don’t talk about financial topics, except where they found some terrific bargain. Shopping for sales is a skill. Shopping for investments needs to be just as important as bargain hunting for a new outfit. You don’t want to start retirement unfamiliar with your financial situation or uncertain how your bills will be paid. Start talking about financial and retirement principles with a close friend or sister or your daughter. Sometimes taking the first step is the hardest one.
5) Agreeing to simply go along. In the world of retirement planning and investing, the professionals often seem to be speaking a foreign language. Rather than learning that new language, women have a special gift of agreeing to go along with “whatever”. Many don’t have the time or the interest to learn the ins and outs of retirement planning. Unfortunately, this can spell bad news for any woman. Adamson says, “When a woman tells you ‘It’s fine’ or ‘Do what you think is best,’ you are in big trouble. She’s really just dismissed you, “agreeing” so she can get on with her day. You haven’t empowered her, informed her, or offered her the best options for her unique situation.”
It can be a slippery slope when the lady is done with the conversation. Unfortunately, she may be agreeing to something that she either doesn’t understand or is not what she really needs. It might cost her in the short term, or worse, in the long run.
If you only take one tidbit from this article, it’s that you shouldn’t sign anything until you’ve taken your time to read the documents and get as many of your questions answered as possible. Having a trusted accountant, attorney, or financial advisor in your court should help take the complexity out of a complex retirement system.
5 Financial To-Dos to Help Conquer those Liabilities
When it comes to successfully planning for your retirement, it would do you well to focus in a couple of key areas. First, recognize that to spend time planning for retirement, you have to move something else to the side. Better to do that before you retire so it’s not such a surprise when you’re 80 and managing your own money for the first time. Second, give yourself some credit for when it comes to money. You know more than you think you do. You might just be uncertain and hesitate when making financial decision. But, you really do get it.
Ok, so take those realities in stride and build on them. It’s important to conquer any liabilities holding you back. These five to-dos should help you pin down some of the more important financial tasks. Adamson notes that, “Women who break down their financial tasks into smaller activities start to feel really good about taking action. Very often, they are able and willing to fit in individual tasks, and after a year, we look back and see how much progress has been made toward their goals. It’s then that they really feel a sense of accomplishment.” So, make your list and make it a priority:
- Save more. Increase the amount you are saving specifically for retirement. Even if you are only a few years away from retirement, every dollar counts. In the case of building a retirement nest egg, more is more.
- Decide where to live. Take a serious look at your housing situation for retirement. Is it in your best interest to stay in that big, old house? Might you be better off selling and moving into a more affordable, newer, more manageable home? Have you figured out how you could age in the place? If you don’t decide, your children may well make the decisions for you.
- Set up your My Social Security account. It’s easy to do on SSA.gov/mySocialSecurity. This allows you access to your most current statement where you’ll see how much—or how little—you will receive in retirement benefits when you start your claim. Having this information in front of you may help you take better financial steps so that you don’t end up a bag lady.
- Check in with an advisor. You might already have a good financial advisor. If not, use some of the many financial resources readily available at large and small financial institutions to get your questions answered. Keep up with financial news, make adjustments to your retirement plans, and schedule an annual review with the advisor or financial company of your choice.
- Get your documents in order. Make sure you have a Power of Attorney and Health Care Proxy, as well as beneficiaries on your retirement accounts. A full estate plan, including your will, is a more complete set of documents. This step is even more important if you don’t have a husband or partner involved in your life.
Some things won’t change—you’re a woman, so you’ll be busy. Your days are filled with confetti and dashes and dots. As a result, you’ve got some liabilities to overcome. But, you’re competent. Others are counting on you. So, for your own future retirement security, take the right steps now so you can confidently say, “Yes, I’ve got this!”