Survey Highlights Planning Gap Between Knowing And Doing Of Baby Boom Women

By

Most baby boom women know they need to take their personal finances into their own hands, but relatively few actually do anything about it, according to a new survey by Prudential Financial, Newark, N.J.

“Most feel having a financial plan is important, but not so many go out and buy the products,” said Vivian Banta, vice chairman, Prudential Financial Insurance Division, at a recent media event. “Knowledge does not translate into action.”

With this information in mind, Banta offered three approaches a financial planner can use should she be interested in advising women clients. Firstly, organize and plan in order to provide the platform from which to act, she said.

A planner could advise clients to organize by looking through all their financial documents, including credit card statements, to track what is spent against a budget, Banta said.

“Only through education will women achieve true independence,” she said.

The next step, to plan, involves leading a client to focus on herself, her needs, her long-term goals and what it might take to ensure financial security over the next 30 years.

This step also includes reviewing ones financial situation annually and developing and refreshing a plan annually, Banta said.

The third piece, to act, or as Banta put it, to “attack,” is “where the gap really resides.”

Acting involves finding a financial planner who is “genuinely concerned about their well-being that will help them assess their goals and financial situation,” Banta said.

This part also means communicating with ones spouse if one is married and eliminating or reducing credit card debt, she said.

According to Prudentials “2002 Study on the Financial Experience and Behaviors Among Women,” 97% of women recognize the value of knowing how much money will be needed in the future.

The survey says that women have taken on more familial financial responsibility than they have in the past. That includes sole or joint responsibility for IRAs (66%), annuities (60%), life insurance (82%) and estate plans/wills (79%); and, 83% of women said they understand the amount of money that will be needed for a secure retirement.

The survey also shows that 73% of women feel that passing money on to heirs is important. However, only 14% have taken steps to ensure an effective wealth transfer. Eighty-four percent of respondents feel securing long-term care is important. But, only 13% own long-term care insurance.

“There is still a great deal of work to be done,” Banta said. “When you consider that women statistically outlive men by approximately seven years, its imperative that they take a more proactive role now to achieve future financial security.”


Reproduced from National Underwriter Life & Health/Financial Services Edition, November 4, 2002. Copyright 2002 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.