Women need ‘financial literacy’ for secure future

The Bakersfield Californian
October 14, 2013

Reading the results of a recent survey prompted me to shout: “I told you so!”

The findings of the Wells Fargo & Co. survey backed up what I had been preaching to my clients and students for years: Both the husband and wife should be involved in developing a couple’s financial retirement plan.

Every fall and spring semester, I teach classes in retirement planning for the Levan Institute for Lifelong Learning at Bakersfield College. With most enrollments, usually only one family member attends. And usually it’s the husband. The same is true with clients seeking my financial advice. Most often it is just the husband who is “in charge” of investing retirement funds.

The 600 women interviewed by Wells Fargo & Co. in the U.S. survey had medium household incomes of $145,000 and liquid assets of $455,000. By the survey’s definition, the women were “affluent.”

Yet 41 percent of these affluent women said they were “not at all” confident about their ability to invest. Only 8 percent said they were “highly confident,” with the remainder falling somewhere in between.

Consider respondents’ attitudes about the stock market: 41 percent said they do not believe the stock market is the best way to grow savings, while 34 percent concluded it was “too risky.” Sixty-four percent admitted they had become more risk-averse as their net worth has grown.

Oddly, the survey results were released in September when the Dow had reached its all-time high. Since the Great Recession of 2009, the stock index of 30-large companies had more than doubled. For people who had stuck it out, the stock market was definitely the way to build their retirement accounts.

Despite some reluctance, women must become more involved and knowledgeable about investing and saving for retirement.

Medical statistics and demographics clearly show that a wife is more likely to outlive their husband, and be left alone during her later years of life.

But death is not the only way couples are “parting” these days. A recent study by the National Center for Family and Marriage Research at Bowling Green State University in Ohio revealed the divorce rate among people 50 years of age and older has skyrocketed in the past two decades.

“In 1990, only 1 in 10 divorces were people 50 and older. Now it’s 1 in 4,” reported sociology professor Susan Brown, the survey’s lead researcher. “This surprised us because the rate for younger people has leveled off.”

Researchers noted several causes for this “graying of divorce” trend: As the giant “baby boomer” generation ages, there are more people over 50 years of age; more women had careers and lack the desire to cling to unhappy marriages; and more people are ignoring their churches’ “no divorce” rules.

But whether they are single because of divorce or death, more women must now shoulder the responsibility of investing and managing their retirement funds.

There is a silver lining in the Wells Fargo and Co. study’s findings.

“We see that women who were taught about investing by someone tend to be more confident in investing,” said Karen Wimbish, director of retail retirement at Well Fargo. “Financial literacy makes a huge difference and has positive rippling effects for future generations.”