We have written often about women being at a disadvantage compared to men when it comes to lifelong financial wellbeing.

In fact, they are also in a worse position than their mothers and grandmothers, simply because they are likely to live much longer and thus need more money to remain comfortable and secure.

Let’s consider a few facts:

On average, women live five years longer than men. In fact, 77 percent of people who are widowed are women. Furthermore, by age 85, women outnumber men two to one, and the majority of centenarians­-a staggering 81 percent-are women.

These facts come from a report by Merrill Lynch and are important because longevity is a critical factor for women and their future financial security.

The reality is that women are more likely than men to be alone and financially self-reliant in their later years. This often comes as a shock that we have helped many elderly ladies to overcome.

Realising early on that financial self-reliance might be the case sooner rather than later, may encourage more women to take a more active role in their personal financial planning (as distinct from planning with or for family/ a partner.)

Despite the growing number of successful, wealthy women, growing career and financial power doesn’t necessarily mean long term financial wellness. Women have to understand that they need their money to work harder , if they are to maintain a comfortable and worry free later life.

Key Issues

  • Caring roles often means that women earn and therefore save less
  • Career breaks often jeopardise promotion prospects
  • The financial industry still caters largely to men (although not here at Magenta!)
  • Women are less confident about investing and thus get poorer returns on their money
  • Lack of successful female financial role models
  • Gender pay gap (yes, we are still banging on about this!)

The Problem

Put simply, it seems that without proper planning, women may have less money with which to fund a longer life. This will inevitably have a negative effect on their financial security, happiness and even their health.

With one in four 65-year-olds today living past age 90 and one in 10 living past 95, everyone needs to plan for a longer lifespan. The most prudent number we believe is age 100. This is especially true for women, whose average life expectancy is five years longer than men’s.

In our experience, many women defer to their (usually male) partner when it comes to financial decisions. This means that if they are then left alone through death or separation, they may be poorly equipped to deal with financial matters.

The Solution

What can help women achieve greater financial wellness?

At Magenta we always work with clients to create a personal lifetime cashflow forecast which runs to age 100. The aim of this is to ensure that they don’t run out of money before they run out of breath!

A personalised financial plan provides clients, especially women who may need extra support, with peace of mind and reassurance that they can live their desired lifestyle, now and in the future, without worrying about money.

It is essential that women really get to grips with a robust financial plan, so they can confidently take over the family finances if this becomes necessary.

We would also like to break the money taboo and positively encourage women to speak openly about their money and any concerns they may have, while acknowledging the challenges that impact them directly.

In our experience, women can take control of their financial futures by talking with friends, mentors, and professionals about money; starting early so their money has time to grow; saving and planning for career interruptions and future healthcare costs; and planning and adapting to changing circumstances as they occur.

Better healthcare and positive lifestyle changes have helped to raise life expectancies across the board, but while longevity sounds like a blessing, none of us would want to be struggling financially during our later years.

Proper engagement with a good financial plan and a comprehensive lifetime cashflow forecast showing future income, expenditure, assets and liabilities, will ensure a good understanding of the challenges (financial and otherwise) that are associated with living a long life.

If you or anyone you know is worried about their future financial security as they get older, please do not hesitate to call us for a friendly chat.