Women Aren’t Planning Early Enough

It’s no secret that women outlive their male counterparts, on average by six to eight years. It’s also a well-known fact that women are increasingly more likely to take on the role of caregiver to their ailing significant other (and to aging parents as well). Despite these statistics, the recent 2019 Trusts & Estates Women and Wealth survey found that women aren’t starting their estate planning nearly early enough.

According to the survey, 61.8% of respondents said that more than 25% of their single or widowed clients are female. This correlates with other studies that show that 80% of women die single (or widowed), meaning they’re often left to foot their own medical and long-term care (LTC) expenses, particularly when LTC funds are already depleted caring for a spouse. According to Sherry A. Varrelman, U.S.Head of Stakeholder Engagement, Strategy & Implementation at TD Wealth in Philadelphia, “these statistics underscore the need for women to be planning early.” Varrelman says on average, women outlive their spouse by 15 years and are often faced with a depreciation of liquidity as a result of caring for a spouse.

It’s troubling then that, based on the survey results, 79.6% of respondents said their female clients typically start planning for LTC only age 50-plus, with 10% saying female clients did no LTC planning at all. Fifty-seven percent of the respondents surveyed agreed that LTC insurance and planning is equally important for both sexes, while 39.6% felt that it’s even more so for women.

Planning Ahead

With an uptick in the number of young entrepreneurial women (44.8% of respondents said that most often, the wealth of their female clients comes from self-made assets), and research showing that millennials, in general, are moving into the $5 million and over net worth space earlier and faster than their baby boomer and Generation X counterparts, it’s becoming evident that financial planning, especially for women given their typically longer life spans, needs to come sooner. Instead, it appears that female clients typically wait for significant life events to update or begin their planning, which can often be too little too late. According to the survey, 50% of respondents said that married female clients came in to update estate plans only on the death of a spouse or after a divorce.

Particularly with divorce rates on the rise, women need to get involved with long-term financial decisions early on, says Alexis Bishop, UBS Wealth Management Branch Manager of Boston South Shore office, or they risk discovering financial surprises such as debt and risk being unprepared to handle the financial responsibilities on their own. While there’s no set recommended age for when to start planning, both Varrelman and Bishop strongly advocate for advising and educating female clients on the importance of financial planning long before any unexpected life events occur. Varrelman says experts at TD Wealth encourage clients to view their wealth plan as a living document, one that’s flexible and can be modified to adapt to differing life events, and to review it annually. Ongoing financial planning, added Bishop, also allows the opportunity to discuss charitable giving, something that women are equally passionate about as men. It's also a great way to get the children (next gen) involved in the process.