Women Have Assumed a Larger Role in Family Finance
The change has been gradual but notable & carries over to retirement planning.
More women have become the primary wage earners in their households. Generations ago, life and financial roles were cut and dried according to gender. Man: breadwinner. Woman: homemaker. Those stereotypes have, thankfully, shattered. According to the Bureau of Labor Statistics, 38% of women in heterosexual marriages now earn more than their husbands. Thirty years ago, less than one-quarter did.1
The Great Recession of 2007-09 may have contributed to this shift. In June 2010, Department of Labor data showed that nearly 22% of American men aged 25-65 were unemployed. In addition, 16.6% of all Americans were in the “underemployed” population, either jobless or working less than 40 hours per week; it is reasonable to assume that men made up roughly half of that demographic.2
So, in mid-2010, perhaps a quarter of American men aged 25-65 had no full-time job, and, in millions more American households, the woman of the house had become the primary wage earner.
As the economy improved, households with women breadwinners were in good shape. A 2013 Pew Research Center study of Census Bureau data found that, by 2011, the median total family income of such households was $80,000, compared to the national median of $57,100 for all families with children. Furthermore, the PRC analysis determined that 40% of households with children younger than age 18 were headed by women breadwinners in 2013, an all-time high. That compared to 10% in 1960.3,4
Wives who earn more than husbands often control family money. Author Farnoosh Torabi (When She Makes More: 10 Rules for Breadwinning Women) conducted her own study on heterosexual households with women breadwinners in 2015, interviewing more than 1,000 women in the process. The key finding? When a woman is the top earner in a household, she is more likely to handle financial tasks and decision making.4
Women who made more than their husbands were 62% likely to pay the bills and 56% likely to initiate family or spousal conversations about money. Respectively, that compares to 43% and 43% when the woman makes less than the man.4
Significantly, 44% of breadwinning women Torabi interviewed made investment decisions for their households (compared to just 27% when the man earned more). On top of that, 54% of breadwinning women took on the task of retirement planning for their households, as opposed to 31% when the male was the breadwinner. These findings are very encouraging, as so many financial professionals urge women to take an active role in saving and investing for retirement.4
One study suggests more women are focusing on retirement planning. Financial Finesse, a provider of financial education for large employers, puts out an annual survey called The Gender Gap in Financial Literacy. The 2015 edition (released last fall) showed a 4.2% rise from 2012 in the percentage of women who said their retirement planning was on course. The percentage of women who had an asset allocation plan for their investment portfolios also rose 4.2% in that interval.5
If you ask some financial professionals, they will tell you that they find women more open to financial education, with fewer entrenched beliefs and presumptions. Women are often quick to realize how much they don’t know, how much they can learn, and how much needs to be done. Coming to the realization that you need to do more for retirement is a good thing. Many pre-retiree households could do much more: according to a BlackRock survey, the average “leading edge” baby boomer (age 55-65) has $136,200 in a retirement savings account, which would produce retirement income of roughly $9,100 a year.6
With retirement accounts and retirement dreams at stake, it isn’t surprising that high-earning women are taking the lead for millions of families – and asking for all the financial education they can get.
Ronit Rogoszinski, CFP® may be reached at 516.596.8581 or rrogoszinski@slatestonewealth.com
www.slatestonewealth.com
Advisory services are provided by SlateStone Wealth, LLC, a registered investment advisor. SlateStone Wealth has gathered the information presented from sources it believes reliable, however the accuracy and completeness of any sourced data is not guaranteed.
Citations.
1 – fivethirtyeight.com/datalab/how-many-women-earn-more-than-their-husbands/ [2/5/15]
2 – marketwatch.com/story/the-three-biggest-lies-about-the-us-economy-2010-06-29 [6/29/10]
3 – businessinsider.com/women-continue-rising-as-breadwinners-2013-5 [5/29/13]
4 – businessinsider.com/breadwinning-women-control-family-money-2015-3 [3/16/15]
5 – nextavenue.org/the-unexpected-news-about-women-men-and-retirement/ [9/16/15]
6 – seattletimes.com/business/workers-need-more-help-making-retirement-cushion/ [5/28/16]
Ronit Rogoszinski has been demystifying investment strategies for individuals, families and business owners for over 25 years. Specializing in transitioning widows and widowers, pre-retirees and divorced individuals through major life changes, Ronit’s expertise is translated to actionable, prudent strategies that are customized to each individual’s unique situation. As a result, Ronit has become a trusted advisor to her clients, developing lifelong friendships while partnering in the management of their financial plans.
Author: Ronit Rogoszinski
Ronit Rogoszinski is a passionate advocate of financial literacy for women who specialized in transitioning widows, pre-retirees and divorced individuals through major life changes. Applying her skills to each client’s circumstances enables her to translate recommendations into actionable, prudent strategies that are customized to each clients’ unique situation. As a result, Ronit has become a trusted advisor to her clients, developing lifelong friendships while partnering in the management of their financial plans. Ronit is a CERTIFIED FINANCIAL PLANNER ™ certificant who combines formal education with life long experience, which has led to a holistic all-encompassing approach for her clients and the creation of Women+Wealth Solutions. Individuals and families with inheritance, legal settlements, or sale of businesses who seek to become educated and confident in working with their financial advisor, look to Ronit for guidance in gaining financial knowledge, budget and cash flow management, portfolio and retirement solutions, as well as working with other outside professionals to best serve the client with guidance towards legal and tax solutions. Ronit’s calm, personal and relaxed nature helps put her clients at ease while remaining focused on the mission at hand, which is to help her clients realize their financial goals. Securities offered through...
