Women urged to chart a financial course

Vanessa Richardson Contributor • E-mail

Despite becoming more active in their financial planning, American women still tend to take small steps toward ensuring a financially secure retirement.

According to Allstate’s sixth annual “Retirement Reality Check” survey, which measures Americans' attitudes toward and savings for retirement, almost half of women — 48 percent — have considered the financial implications of retiring alone, compared with 36 percent of men. Yet when asked who takes the lead in planning for retirement, 45 percent of women and 65 percent of men said the husband or male partner.

The majority of respondents said they are not set for retirement, although men feel a little more optimistic than women. Only 19 percent of women, compared to 23 percent of men, said they felt “very prepared.”

Because many marriages end in divorce and women outlive men by an average of five years, the Labor Department estimates that nearly 90 percent of women will end up managing their finances alone in the latter part of their lives. But even though women have gotten that message, the realization has not made them take better care of their own finances, according to the Allstate survey researchers.

“Women are educated, but they’re so busy they’re not taking the time to learn,” said Barbara Stanny, author of personal finance books for women such as "Prince Charming Isn’t Coming" and "Overcoming Underearning." “It’s due to resistance and a lack of education on the topic, so when they actually do face their finances, it all looks so complicated, and they get overwhelmed.”

'Don’t worry' is not good advice
The disconnect between men and women’s views on finances is mostly due to gender differences from childhood, said Stanny. “In my experience, men were raised to be financially successful, and women were raised to be financially dependent.”

Stanny, who came from a wealthy family, remembered her father’s only financial advice to her was, “Don’t worry.” She married a financial adviser who turned out to be a compulsive gambler, and even though she knew about his problem, she let him manage their finances. After he had lost millions and piled on debt, Stanny asked for a divorce and, in her 40s, started learning how to manage her own money.

“Women typically don’t get serious about managing money until they hit a crisis, like when they’re on the verge of retirement, and that is the worst time to start.”

Financial empowerment leads to higher self-esteem, and more women, especially baby boomers, are realizing that fact, said Cindy Hounsell, president of Women’s Institute for a Secure Retirement. The institute was founded by multimillionaire philanthropist Teresa Heinz, the wife of Sen. John Kerry, to help low– and moderate-income women become more knowledgeable about their finances.

"What I’ve seen of my married friends is as their kids have left the nest and they’ve gone back to work, they have also become more confident in their finances and now believe themselves to be financially savvy women," said Hounsell.

Hounsell, who is 60, divorced, and still worries about her retirement finances, said younger women in their 20s and 30s should really be boning up on their financial knowledge.

"Generation Xers in particular are not addressing finances, and this is the time when they should be. When I talk to young married women, they either say neither spouse is doing anything or it’s hit and miss, like they’re focusing on the kid’s college funds instead of their own retirement."

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