When it comes to women and wealth, the narrative has largely focused on how women are falling behind financially. However, more recent studies are showing another piece of the picture. While it is true that many women are facing challenges, a large number also control a significant portion of the nation’s wealth.
A report released by BMO Wealth Institute titled “Financial Concerns of Women,” which analyzed the personal and professional progress of American women within the last 50 years, revealed women are in control of 51% ($14 trillion) of personal wealth in the United States. Furthermore, it is predicted that American women will be in control of roughly $22 trillion by 2020.
More women are also leaders on the job. The Institute found that women have assumed a little more than half (52%) of management and professional positions in the United States. An increasing number are also pursuing entrepreneurship; women now own 30% of all private businesses. These advancements have resulted in a rise in income. Consequently, more households are being supported by women. The study reports women are the primary earners in more than 40% of U.S. households. This is a quadruple increase when compared to 1960.
Even though women are making great strides with wealth accumulation, they are not keeping it all for themselves. According to The 2011 Study of High Net Worth Women’s Philanthropy and The Impact of Women’s Giving Networks, women are either sole or equal partners when it comes to making a charitable contribution in 90% of high-net-worth households. Women also comprise 62% of donors who make contributions following their death. When the survey respondents were asked what motivates them to give, 81% said they were moved by how their gift would make a difference in someone else’s life.
The price of putting others first
“Equality is on the horizon yet many professional women still face obstacles, often stemming from the need to take care of loved ones while trying to achieve professional goals. These challenges that affect women on a daily basis have both emotional and financial consequences,” said Mary Jo Herseth, National Head of Banking, BMO Private Bank.
This finding was also made in a recent survey conducted by Transamerica Center for Retirement Studies, which revealed that 54% of women plan to retire after the age of 65 or not at all. This is primarily because of time away from the workforce to care for young children or aging parents. The Family Caregiver Alliance estimates roughly 66% of women take on the role of primary caregiver.
Health care costs chip away at wealth
Health care costs are also chipping away at women’s wealth. Since women tend to live longer than men, they will be saddled with more health-related costs in the long run. The Employee Benefit Research Institute estimated that after the age of 65, a man would need a minimum of $65,000 to have a 50% chance of being able to pay for all future healthcare costs. A woman in the same age range, on the other hand, would need $86,000. If both desire a 90% chance of being able to cover costs post retirement, the savings gap is slightly smaller, but not by much. A male retiree would need approximately $122,000 and a woman would need about $139,000 to cover healthcare costs.