Women Need Their Own Financial Accounts As The Family Structure Changes
Traditionally, couples blended their financial lives and assets and opened a joint account. However, changes in our family structure–later marriages, high divorce rates, second marriages, cohabitation, single
1. Gender Gaps Persist
Women are paid 82% less than men, according to a 2017 Pew Research Center study. According to a UBS study, the cumulative effect of starting at a lower base at age 25, with raises on that smaller amount, will provide 38% less wealth for women by the time she reaches 85. Of course, women may not receive the same raises or bonuses as men adding to this gap.
2. Retirement Savings Will Be Less
These amounts may be a conservative amount. A Merrill Lynch study with Age Wave has shown that with the multiple impacts of lower earnings, parenting, caregiving, and reduced retirement savings opportunities, women will collect $1,055,000 less than men by their retirement age.
3. Lower Earnings Impact Social Security Monthly Benefits
Average social security monthly benefits for retired workers were $1,422 in 2018, with women receiving $1,049 versus $1,382 for men. Across all employer retirement plans, men have higher average account balances, which gap grows wider with age.
4. Women Hold More Debt And Lower Credit Scores
Women earn 57% of the bachelor’s degrees in US colleges and universities. They have more degrees in every higher education category, including doctorates, than men. However, this is not translating into higher earnings for women.