A year ago, in the emotional aftermath of her divorce, Ann Burr Clevenger determined herself in a world of bewildering, new things. There was the living alone for the first time in over a decade; the new task in a new city; and there, on her kitchen table, in her inbox and her desk, a growing collect of documents detailing her retirement savings a daunt, taunting, seemingly incomprehensible mess.
“One of the things I had to do after the divorce was consolidate my retirement fund 401( k) from my previous chore and my ex-husband’s IRA, ” said the 43 -year-old mom-of-two. “I didn’t have all the account information I needed, and had never is dealing with things fiscal matters like this before, so had to start from zero. It was a nightmare.”
Her ex-husband, an investment banker, had taken care of the family’s finances for the duration of their wedding, Clevenger explained.
“I hate to be so stereotypical, but it only wasn’t something that interested me or was my strong suit, ” she told over the phone from her Avon, Connecticut, home last month. “But then we got divorced, and abruptly I was responsible for my financial situation for the first time in 13 years.”
Clevenger had “never been solely financially responsible for buying a house, running a household and properly supporting two children. And I had to figure it all out in three months, ” she told.
Since graduating college, Clevenger had been financially self-sufficient, running chore after task without pause. But though there was fund in the bank, having a plan for it all had never been a priority. As a child and later as a young adult, she was never educated on financial planning. Then she satisfied her ex-husband, who began managing her finances early on in their relationship.
“We merged our accounts before we even got engaged, ” she recalled.
When the couple separated many years later, Clevenger said she wasn’t in a “bad financial situation, it was more that I didn’t know the first thing about managing it.”
Her story is not unusual.
Research shows that 80 to 90 percent of women will be solely responsible for their finances at some phase in “peoples lives” due to the death of a spouse, divorce or other reason; yet women across the board report lower levels of fiscal knowledge and trust than men.
This is not a new problem, but as evidence mounts of the financial instability that many girls are facing, particularly in retirement, a sense of urgency has recently grown around finding solutions for this troubling gender gap.
In March, a report by the National Institute on Retirement Security found that women are 80 percent more likely than humen to be impoverished at age 65 and older, while women between the ages of 75 to 79 are three times more likely than men to be living in poverty.
“As women continue to lag behind humen in terms of saving and planning for retirement, it is even more concerning that women statistically tend to live longer than men, thereby implying an even greater need for savings and preparations, ” said Catherine Collinson, president of the nonprofit Transamerica Center for Retirement Studies, in response to the report. “A woman’s path to a secure retirement is filled with obstacles .”
A 2015 Standard& Poor study on global fiscal literacy found that simply 30 percent of women are financially literate is comparable to 35 percent of men. In 2014, a study conducted by the Global Financial Literacy Excellence Center procured an even greater gap: only 22 percent of U.S. girls surveyed, compared to 38 percentage of men, could answer three simple finance-related questions correctly.
Other nations in the survey indicated a similar pattern. “Women in countries as different as Germany, Australia, Canada, Italy, France, Sweden, Switzerland, New Zealand, Japan and the Netherlands all display lower levels of fiscal literacy than men, ” economist Annamarie Lusardi, one of the study’s writers, said last year.
An overwhelming majority of American girls more than 85 percent don’t know how to invest or select a fiscal product, according to a 2010 -2 011 Prudential report. Fewer than 2 in ten females surveyed said they felt “very prepared” to construct wise fiscal decisions.
This lack of fiscal knowledge and confidence has impacted women’s ability to plan ahead. Only one-third of women in America have a financial plan in place, according to the Prudential survey. Almost half of women who earn more than $30,000 a year fear that they’ll up “broke and homeless, ” per a 2013 report by Allianz.
“Too many girls run through life and never take control of their own financial health and future, ” told Clevenger, as she reminisced over the choices she made as a younger girl. “I suppose girls get a pass, culturally, when it comes to finances. There are of course many families where the opposite is true, but at least in my experience, it seems it’s often the woman who says her husband is in charge of finances, and culturally that’s okay.”
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Bridging The Gender Gap At The Office
With money woes weighing heavily on her mind, Clevenger shared her concerns with a coworker one day last year, a few months after the finalization of her divorce. Hearing her worries, the colleague recommended she check out a “financial fitness thing” organized for free by her new employer, Aetna.
“It’s definitely something “theyre saying”‘ I should totally do that and you never do, ’ but in this case I did actually end up going down and making an appointment, ” said Clevenger, who’s ran as a social media manager at the health care company since August 2015.
Financial wellness programs have been offered by some companies since at least the’ 80 s, but the prevalence and variety of them appear to be on the rise. Fifty-eight percent of U.S. employers have ensure “an increased significance of fiscal wellness in their organization, ” according to a 2016 report by consultancy firm Aon Hewitt. By the end of this year, Aon Hewitt estimated that more than 7 in 10 U.S. employers will offer their workers some kind of fiscal wellness program.
At Aetna, fiscal wellness programs were first introduced in 2007. Their launch had been prompted, according to company spokesman Matt Clyburn, by a troubling new trend among employees.
“We noticed that employees were taking more loans from their 401( k) schemes, a move that often indicates fiscal stress and can lead to unforeseen outcomes, ” he wrote in an email. “We felt it was our responsibility to teach employees about their finances and help them plan for the future.”
Today, the company offers a variety of fiscal wellness alternatives, including workshops, one-on-one consultations with financial planners and online tools, like calculators and checklists.
In 2015, nearly 5,500 Aetna employees completed fiscal wellness assessments and approximately 7,700 participated in one-on-one consultations or workshops with financial planning professionals, Clyburn told. In total, the company’s financial wellness offerings reached more than 25 percent of the workforce; 77 percent of Aetna’s participants were women.
Clevenger recollected meeting a financial planner from Financial Finesse, a California-based fiscal wellness firm, in a quiet room at Aetna’s Hartford, Connecticut, office last year.
“’Here’s my financial situation, ’ I said to him. I just brought all my the documentation and basically sat there and vomited it all out on his desk, and was like’ what do I do? ’” she recollected, laughing. “It was great. I’m still so grateful to him. He took all my information and really listened to what was important to me.”
The consultant afterward followed up with Clevenger, providing her with a worksheet and recommendations. She implemented every single one of them, she told a move that’s filled her “with confidence in my fiscal future.”
“I want to be clear that it wasn’t just like, I met with some guy and he told me to’ do this, this, this, ’ and I blindly did it. He wasn’t merely a replacement for my ex-husband. It was really more a’ teach a man to fish’ situation, ” Clevenger told. “He helped to create a situation where I was informed enough to take care of it all myself. I now understand more about where my fund comes from and where it’s running and why it’s doing certain things. Knowledge is power, especially when it comes to money.”
“I feel empowered, ” she added.
( Story continues below .)
Are you financially literate? Standard& Poor asked more than 150,000 adults in 140 -plus countries five simple finance-related questions for its 2015 Global Financial Literacy Survey. Answering three out of four right( topics 4 and 5 counting as one) means you’re financially literate. Merely one in three people globally gratified that criterion, the S& P survey found. Find how you fare in the quiz below :
When’ I Don’t Know’ Is A Good Thing
Based on a growing body of research into the efficacy of fiscal wellness programs at the workplace, Clevenger’s positive experience is not atypical.
“According to the evidence I have reviewed and my own is currently working on workplace financial education, these programs have an impact, ” Lusardi, a professor at the George Washington School of Business who’s written extensively about financial wellness, told HuffPost in an email.
These programs appear to be particularly beneficial for women, she added. “Interestingly, it is the women who are more likely to change behavior after attending fiscal education programs.”
Pointing to her research, Lusardi said girls are more likely than humen to admit that they “don’t know” the response to money-related questions a very good sign when it comes to financial wellness.
“[ In our 2014 examine] the reason why females display lower fiscal literacy than humen is not because they answered incorrectly[ but] because they disproportionately answered with’ I do not know, ’” Lusardi said. “This is a great result, females do not know, but they know they do not know, so they are an ideal target for fiscal education programs and they are also ideal fiscal decision-makers: when it comes to finance, overconfidence does not help.”
Women are also more likely than humen to take advantage of financial education provided by their employers, according to a report last year by Financial Finesse. In 2014, for instance, women made up two-thirds of total employees who completed a financial wellness evaluation through Financial Finesse’s online learning center.
With this in mind, experts say companies can play an important role in bridging the gender gap in fiscal wellness by offering educational programs to their employees. Programs targeted specifically at girls could be even more beneficial.
Instituting financial wellness programs can also be enormously beneficial for employers themselves, experts tell.
“We know that stress is, or can be, an underlying cause of acute and chronic illnesses, which result in sick days taken and employees accessing the employer-sponsored medical scheme. This results in an increase in expenditures and decreased productivity, ” said Bruce Elliott, administrator of compensation and benefits at the Society for Human resources. “As a outcome, taking this issue on and teaching individual employees about personal finance can add immediately to the bottom line.”
Financial wellness programs can also help retain and attract talent.
Andrew Hopkins, a spokesman for State Street Global Advisors, told the story of a successful three-day financial wellness bootcamp organized last year by one of its corporate clients.
“Following the event, the employer saw a direct impact on employees’ 401( k) decisions. For instance, over half of employees increased their deferral rates from the previous one-quarter. The employer also gained many intangible benefits. People said the event made them happier to work for that organisation, ” he said.
For employers looking to adopt financial wellness programs at their organizations, fiscal advisors have a few key pieces of advice.
“First, they should survey their employees to see what topics are top of mind for them, ” said Kim Kasin, a fiscal guidance executive at Bank of America Merrill Lynch. “Second, different generations have differing requires. Millennials are focused on managing down student loan indebtednes, while baby boomers are preparing for retirement. Targeted education will ensure greater engagement.”
Companies, Kasin added, should also ensure their employees are well aware of the programs available to them. About 30 percent of employees working at large firms “d no idea” such programs were on offer at their workplace, according to Bank of America’s 2016 Workplace Benefits Report.
Women And Money: A Crisis
Financial insecurity is a problem that impacts the majority of Americans.
Since the so-called Great Recession of the late 2000 s, more than 70 percent of people in the U.S. irrespective of race, gender or socio-economic status have been living paycheck to paycheck, according to a 2013 Bankrate.com survey. The American Psychological Association said fiscal stress is the most common cause of stress in the U.S.
But for women, the numbers are especially dire.
Women live, on average, five to six years longer than men. This means their retirement savings need to cover longer life spans.
However, research shows that though both men and women’s retirement savings fall short, girls face a far more challenging future. A median 45 -year-old man is projected to have a savings deficit of $267,233 to meet median retirement expenditures at age 65, according to Financial Finesse. In contrast, a median 45 -year-old faces a shortfall of $522,262.
There are many reasons for this staggering retirement gender gap. Not merely do girls earn significantly less than men, but they also tend to receive lower average monthly Social Security pays due to less time spent in the workforce( reasons for this include leaving work to care for children or elderly parents ).
Women may also receive reduced monthly benefits due to the death of a spouse. According to a 2011 U.S. Census bureau report, the median age of widowhood across all ethnicities was around 60 years, but the average life expectancy of U.S. women is 81 years. A female may receive reduced Social security systems benefits if widowed. Social security systems benefits are typically reduced by one-third when one spouse succumbs, according to a 2005 is present in the Social security systems Bulletin.
In 2014, the average Social Security income received without women 65 years and older was only $13,824, compared to an average benefit for men of $17,911, according to a National Institute on Retirement Security report.
Widowed females depend on Social security systems benefits for 58 percent of their income. Widows are twice as likely to live in poverty at and after retirement age than widowers, such reports concluded.
There’s also the issue of divorce. It’s estimated that between 30 and 50percent of matrimonies in the U.S. objective in divorce, which can have devastating financial repercussions to both parties. Research reveals, however, that divorce tends to be more financially damaging to women than men.
To limit this gaping fiscal divide between the genders, experts tell a multi-pronged approach is necessary. For one, wage equality needs to be addressed. But improving fiscal literacy is also critical.
Groups like the Global Financial Literacy Learning Center and the LiSa Initiative, a grassroots movement aimed at providing fiscal education to women, believe that financial learn needs to be enhanced at every stage of life, from schools to workplaces.
“These changes tend to form early in life and schools are the most effective style to reach a large number of women, ” told Lusardi, an advocate for the inclusion of financial literacy classes in not only high schools and college, but elementary schools as well.
“Until we add fiscal literacy in school or in the workplace, it is hard to expect major changes, fiscal literacy is not acquired by simply watching the world around us, ” she added.
The LiSa Initiative is also working to bring fiscal wellness workshops to women in communities across America, including prisons as well as religious, military and veteran organizations.
Earlier this year, Dr. Nicole Terry, a fiscal education instructor with the group, led a six-week financial education course at a women’s prison in Jacksonville, Florida. Terry taught 21 inmates “everything from the psychology of fund to practical lessons, such as creating a fiscal budget and reducing debt, ” a LiSA Initiative spokesperson told HuffPost.
It was an emotional experience for everyone involved. “Nicole cared about us and constructed us feel like we were an important part of this world, ” one participant said.
Clevenger said she now encourages all her colleagues to attend fiscal wellness programs at work.
“I cannot recommend these programs highly enough, ” she said. “It would be hard to overstate the difference between me now and me two years ago. I went from not knowing how much fund I had in my accounts to having a handle on my whole fiscal life.”
Everyone, she emphasized, regardless of situation, would benefit from such programs. “You just never know, ” she told, what challenging curveball life may throw your way.
“I was married for 10 years, and you plainly don’t think to yourself,’ I’m going to be divorced one day, so I better analyze up the finances. Nobody believes like that, ” Clevenger said. “But in retrospect, I wish I had taken a more active role and done things differently.”
I think it’s important, even when you’re married, and when you have blended finances, it’s important to be aware, ” she added. “Like any other aspect of your life your mental life, your physical life your financial life is part of that painting too. It’s not something that anyone else should be responsible for.”
Read more: www.huffingtonpost.com