Baby Boomer Women Need Advice
They're thinking about relationship changes, retirement and inheritance.
Baby boomer women are part of an American Silver Tsunami.
They were about half of the 76 million babies born from 1946 through 1964, and they now range in age from 59 to 77.
Many women have inherited, or will inherit, assets from their parents, their husbands and even their in-laws.
Thanks to work, investments and inheritance, 45% of American millionaires are women, and 48% of estates worth more than $5 million are controlled by women.
Many baby boomer women with assets need advice about insurance, retirement planning, income planning, long-term care planning and other financial matters. Addressing the weaknesses in boomer women’s financial planning can help advisors capture lost income, eliminate downturns and dominate their local markets.
Topics to Address
So, what should be on the agenda when you talk to boomer women/?
1. Divorce: In the 2018 Worthy study “Building a Financial Fresh Start,” about 22% of the women surveyed were 55 or older; most of the older survey participants were already divorced.
Three nasty surprises divorced women reported encountering were:
- Hidden marital debt.
- Child support or alimony payments that were lower, or shorter-lasting, than expected.
- The high cost of health insurance.
2. Widowhood: In 2019 there were 3.47 million widowed men and 11.41 widowed women.
The total number of widows and widowers has been increasing by 1 million per year, and the COVID-19 pandemic may have accelerated the rate of growth.
The household income for a wife typically falls 37% after a husband dies. That’s far more than the 22% income drop that husbands experience when their wives die, according to government figures.
The death of a spouse also tends to lead to a bigger decrease in assets for widows than for widowers.
Women who were unclear about their family finances may have had an opportunity to learn about the family finances just once a year — at tax time — when they signed joint returns.
3. Poverty: Many women find themselves in financial jeopardy in later life.
Nearly three out of four Americans living in poverty over 65 are women, and older women living alone are more than twice as likely to be impoverished as are men.
After decades of inadequate preparation for retirement the baby boomer generation of women faces the biggest risk of poverty.
The women you advise may be unlikely to face poverty, but severe long-term care costs could increase that risk, and one thing that can decrease the risk is a thorough understanding of what they have.
Women need to know where things are. This includes life insurance policies, safe deposit boxes and keys, investment accounts — all of it.
Women must be able to get to the right assets at the right time, and they need to know, for example, whether some life insurance policies or annuities contain special provisions that can help clients pay for long-term care.
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(Image: Dmytro Zinkevych/Adobe Stock)