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Financial Literacy in Working Women Improves While Knowledge Gap Persists for Female Retirees and Widows

Recent studies reveal that financial capability among working women is improving, but closing the financial literacy gap has a long way to go as it relates to retired women and older widows. Women will be alone and in charge of themselves for a long period of time. But statistics show that women probably don’t have an estate planning attorney, CPA, or financial planner on their personal team of professionals to help them along the way.

Financial advisors and estate planning practitioners see clients every day who have become widowed unexpectedly. At Your Caring Law Firm, we recently met with a woman in her 40s. Her husband had died in an accident, leaving her and their three children who were under age 20. In her shock and grief, the woman explained that she didn’t have a good handle on the family finances. She didn’t know the passwords to log-in to the banking and investment accounts. She didn’t know the name of the insurance agent to contact about her husband’s life insurance, or the amount of the policy – or even, really, if her husband still had life insurance. She was pretty sure they had Wills that had been written when their oldest child was born 19 years ago, but she couldn’t think where they were located. She kept saying, “I know I should know these thing, but I thought I had time to learn! We’re always so busy. My husband handled these things. What do I do?”

Time to learn may be shorter than generally known. Women become widows at the average age of 57.8 years. In fact, the U. S. Census Bureau reports that the percent of women who live in a household without a spouse increases from 40% to 84% from age 55 to 85.

Professional advisors also meet with women who are reeling from the financial impact of their divorce – with issues that may arise even decades later. Countless times at Your Caring Law Firm, we have met with women who have come to us after their ex-husbands died. They show us copies of Marital Separation Agreements that clearly show that the ex-spouses were obligated to maintain life insurance policies of specific amounts for their benefit. But the policies have lapsed, or the beneficiaries were changed, and the women are left with nothing. Bewildered, they ask us, “How could this happen? This is not right. I was depending on that money to support my retirement.”

It is important that financial advisors and estate attorneys take the time to educate women further on saving and planning for retirement and life alone.

According to the 2014 TIAA-CREF Institute’s Working Women’s Financial Capability Study, spearheaded by Professor Annamaria Lusardi of the Global Financial Literacy Excellence Center, 55% of the women surveyed indicated that they participated in self-directed retirement savings accounts. However, only 44% have tried to figure out how much they should save for retirement. Another startling statistic from the TIAA study found that 46% did not know whether a single company stock is riskier than a stock mutual fund.

Particularly distressing was the TIAA study’s conclusion that, “despite their high levels of indebtedness, apparent financial fragility, and low financial literacy levels, working women do not frequently seek professional financial advice.”

So what’s the solution?

For professionals, taking the time to target women’s financial needs via educational outreach is crucial. The messaging must be clear and communicated in a non-condescending manner. The use of case examples and specific planning scenarios is valuable in helping clients apply strategies to their own situations.

The following are common key messages discussed at Your Caring Law Firm:

1. Women must accept the reality that they likely will live longer than their male spouses and must prepare themselves for when they, alone, will be required to make well-informed choices.

2. Although spouses previously may have taken the lead as it relates to retirement planning and investments, it’s never too late for women to become engaged and be a proactive partner in that process.

3. Self-educate by attending financial seminars, accessing library books on the topic, listening to podcasts and watching videos to increase financial awareness.

4. Married women should sit down with their spouses and request to be “debriefed” on matters involving retirement accounts and estate planning documents. Practice logging in to digital accounts and information to ensure working passwords.

5. Single women and widows should make an appointment with a financial advisor, CPA, and an estate planning attorney to assess their preparedness for retirement.

6. Everyone immediately should begin to put the framework in place for legal documents they’ll need as they advance in age, such as:
· Last Will & Testament
· Revocable Living Trust
· Durable Power of Attorney
· Healthcare Surrogate
· Living Will

While more effort is needed to close the gender gap in financial literacy, the good news is that informed women recognize the need to increase their knowledge. It is also encouraging to note that women are more likely than men to change their behavior after attending a seminar on retirement goals and saving behavior, according to Professor Lusardi’s research.

Your Caring Law Firm is happy to be a resource for those who want to learn more about estate and retirement planning. Please visit the “Resources” tab at, or call (407) 622-1900 to set up an appointment.