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Unique challenges for women investors

December 8, 2014, 9:51 am

Due to a number of gender-based challenges, women may be playing catch-up when it comes to investing for retirement and other long-term financial goals.

Women continue to represent a growing share of household income. More than one-third of married women earn more than their husbands1 and 40% of women with children are the primary breadwinners in their families.2

Shelley Ford

Shelley Ford

But even high net worth women cannot escape the gender-based challenges that may hinder their ability to ensure financial security in their later years. Consider the following factors affecting women as they invest for long-term financial goals such as retirement.

The Gender Gap–a Reality Check

  • Income: Women who worked full-time and on salary earned $0.82 for every dollar men earned in 2012 – a considerable difference over the course of a lifetime. The disparity was widest for workers aged 45 to 54 years ($0.75 on the dollar) and narrowest for those aged 25 to 34 years.3
  • Employment: Women typically spend more years out of the workforce to care for family members. Studies estimate that 3 out of 4 informal caregivers are women, many of whom are middle-aged mothers who have cut back on their work hours, quit their jobs, or taken a leave of absence.4 Since traditional pension plans and Social Security benefits are generally determined by years of service, leaving work for periods of time often means lower retirement benefits.
  • Retirement Income: The average annual pension benefit of women aged 65 and over is $13,225, compared with $20,434 for the average 65-year-old man.5 Furthermore, only 29.2% of women over 65 receive pension benefits at all.6
  • Social Security: On average, a retired female worker received an average monthly Social Security benefit of $1,134 during December 2013, compared with $1,451 for the average retired male. This 22% differential has held steady for the past five years. 7
  • Longevity: Women tend to outlive men by about five years, and life expectancies continue to rise.8 In addition, according to U.S. Census Bureau data from 2012, women age 65 and over were three times as likely as men of the same age to be widowed (37% compared with 12%), and nearly three-quarters (73%) of women aged 85 and over were widowed, compared with 36% of men.9

What does this mean to you? Simply that all women — whether single, married, divorced or widowed — should make investing for long-term financial goals a lifelong endeavor.


1Source: U.S. Bureau of Labor Statistics, “1988–2013 Annual Social and Economic Supplements to the Current Population Survey (CPS),” March 2014.

2Source: Pew Research Center, “Breadwinner Moms,” May 2013.

3Source: Bureau of Labor Statistics, U.S. Department of Labor, The Editor’s Desk,Women’s earnings, 1979–2012,” November 2013.

4Source: AARP Public Policy Institute, “Understanding the Impact of Family Caregiving on Work,” October 2012 (based on 2009 data, most recent available).

5Source: EBRI estimates of data from the Current Population Survey, March 2011 Supplement (based on 2010 data, most recent available).


7Source: Social Security Administration, “Number of Social Security Recipients – Number in current payment status and average monthly amount, by sex of beneficiary,” December 2013.

8Source: Center for Disease Control, National Center for Health Statistics, October 10, 2012 (based on preliminary 2011 data, most recent available).

9Source: U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2012 (most recent data available).

If you’d like to learn more, please contact Shelley Ford, a financial advisor with The Pelican Bay Group of Morgan Stanley Wealth Management in downtown Denver. Shelley can be reached at 303-572-4839 or visit http://www.morganstanleyfa.com/pelicanbaygroup/story.htm.

The information contained in this interview is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.  Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.

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Shelley Ford

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