Women Boomers Often Neglect Their Own Financial Planning
A recent survey of American baby-boom women (ages 34-55) shows that most women in this age group find it highly important to have enough money to retire comfortably. Yet, a far smaller percentage has actually taken steps to ensure that outcome.
The survey, done by Prudential Life Insurance Company of America, Newark, N.J., also finds that while baby-boom women take steps to ensure their physical safety and the safety of their loved ones, (most have smoke detectors and cars with seatbelts) only 46% said they have a will, trust or an estate plan in place.
Other survey findings underscore the notion that baby-boom women want to be financially prepared for the future, for themselves and for their families, but are unsure how to create that reality.
Seventy-eight percent said securing long-term or institutional care insurance is important and 61% said they understand that nursing care can be very expensive. But, only 50% said they know first-hand about the actual costs of long-term care and only 5% of those surveyed own long-term care insurance policies.
Almost all of those surveyed, 97%, understand that saving for retirement is important (83% answered “very important,” while 14% answered “somewhat important”); however, fewer understand, and even fewer still assume management of, their individual retirement account or 401(k).
Seventy percent of respondents feel that passing money on to heirs is important; but, only 14% of those with children have done formal planning, including the creation of a will, trust, estate or a formal financial plan.
Although Prudential undertook the survey as a marketing tool for the female baby-boom population, its insurance agents can use the information and approach their clients through age-based selling, says Anna May Kinne, senior vice president and chief marketing officer for Prudential.
“The findings from the survey validate the fact that there are real needs among women and help us identify gaps we can fill,” Kinne says.
One of the reasons baby-boom women have been reticent regarding their finances is perhaps the daunting question of where to begin. This can be an opportunity for agents who want to work with this demographic, says Kinne.
“I think we can spread the word through our Prudential agents and advisors,” says Kinne. “When you sit down with a trusted advisor, thats what you really need when you go through your choices.” Making long-term decisions is not something a client should “dabble in. Its great to get information out in a way that (a client) can sit face-to-face (with an agent and) select the right option for (the client).”
Kinne says another issue facing baby-boom women is choosing a financial priority.
“What do you do first? Some of us have a child in elementary school, so were saving for college, and aging parents,” Kinne says. “There isnt always enough money to go around; thats why you need someone to help you make choices.”
Although she finds the results of the survey unfortunate, Kinne does not find them surprising.
“Im a baby boomer. I dont spend time on my own financial position and Im in the business,” Kinne says. “I dont know of any woman who isnt maxed-out in terms of time.”
Despite the apparent lack of time and information, Kinne believes there are many ways that the value of planning for ones financial future can be communicated to baby-boom women.
“I think there are a lot of different approaches we can take, going to newspapers and magazines, including this (survey) information in Ladies Home Journal and Family Circle,” says Kinne.
“I think the way women want to get information is through talks with other women, or through media, so they dont have to react immediately; so, were pursuing print and broadcast media and were also working with womens groups–National Association for Female Executives and Financial Women International.”
Kinne feels that baby-boom women should take heed of the message inherent in the survey findings: that they tend to nurture others, yet often neglect to take care of their own financial well-being. She says, “Something thats our greatest strength can turn out to be our greatest weakness.”
Reproduced from National Underwriter Edition, June 22, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.