What Road Do I Take?
Because Alice does not know where she wants to go when she inquires of the Cheshire Cat, “What road do I take?” the cat reminds her then that any road will get her there. Our Alice is not stupid or confused, she is freaking tired. Perhaps even worse, she is discouraged. Alice, when she lived in Wonderland was in her first decade at age 7. The decades of life have worn away Alice’s naïve view of the world. Today, older working women in particular may be feeling a bit of wonderland madness as just one of the effects of Covid-19. The path forward is anything but clear.
When speaking to the National Women in Roofing this past spring, I presented the calculations from americanprogress.org to demonstrate the financial injury a woman and her family endure when she leaves the workforce to care of others. This includes measuring the loss of contacts, skills, wages, raises, 401(k) contributions, 401(k) matches, and more. In the past, women have made caregiving decisions without the benefit of understanding the total cost of care. The rest of us benefit from women’s continued ‘free’ caregiving in our society.
What did the workplace look like for women in 2020? I strongly encourage you read the McKinsey & Company study that asked that question. The study focuses on women who leave the workforce and those contemplating leaving the workforce. I can tell you our pipeline is the women who are wealthy in their marriages and suddenly face a far different financial profile if they leave that marriage. This risk increases when women do not participate in the workforce for some or many years. Black women and Latina women face the most hurdles to financial freedom. In part, this is because they are more likely to be the sole breadwinner in their family with all the pressure that brings. The pandemic changed cracks in working women’s lives to sinkholes, as they became teachers, caregivers and remained workers all in the same 24 hours each day. Women with disabilities face these same challenges plus the one they always face with the disability.
Living even briefly with a disability brings insight into the daily experience of those who cannot escape. Replacing each ankle with a titanium ankle and then having one repaired meant I was off my feet for 12 weeks each time. I had to learn to walk again after. Each time I was running my business, serving clients, and participating in the other facets of my life. A major difference is I had the financial freedom to hire a limousine service to take me to client appointments and business events. I did this after trying to save a few bucks using taxis (this was pre-Uber). Left in a hot parking lot waiting for 2+ hours for a taxi when one event concluded, I decided spending the extra money was more than worth the price. Struggle and humiliation each day when just trying to get your work done makes everything harder. If you never have to live with a disability, racism, or poverty, it is easy to understand how we got here. The folks who have power & money make rules that work for them, not others. Having economic confidence makes many choices available that keep women working.
Women, socialized to avoid learning about money, money in marriage, the cost of not working, the cost of longevity and the long-term cost of education, pay a high price later. Overall, we earn less, pay more for our education, lose more when we marry and when we divorce, and remain in the collective dark about how to get capital to start a business, run a business, sell a business, ask for a raise, or connect what we study to what we will be paid in work.
Working with women over the past 31 years to ensure they receive fair monetary settlements in divorce and then steward that wealth for the rest of their lives, I can tell you that the pandemic divorce has increased the economic fragility of women in the extreme. When working through divisions of assets, many women still do not realize something as basic as the date of separation being the financial line in the sand for defining marital property. So unless otherwise negotiated, agreeing to a false, earlier date of separation (DOS) means that all company plan pensions, savings plans, and matches after DOS are separate property for the party that earned them. Examples of how often women work against their own self-economic interest are common. The response we receive most often when we ask how this result came about is “I didn’t know”.
I want to believe that our industry is in the business of helping people solve money issues and yet we do not routinely help families in one of the largest transactions in their lives – divorce. We only ‘help’ them after to manage what assets are left. Women in business received capital for the first time in their business lives in some cases when the PPP loans came through. That ended up a bit of lottery because we are back to those that knew what to do and how to do it. See above where the most basic understanding of how money works remains elusive to 50%+ of our population.
For advisors who think they never see the women I am writing about, I challenge you to this one-week experiment. Use every opportunity over a week period to connect with any and every woman you know of every age and ask her a few questions (see the planning process connection after each question):
· What do you think is your level of understanding around money in work, partnering (marriage/live-in), old age? (understanding her circumstances)
· Do you think of the economic impact to you when you make a decision (like taking care of kids/grandkids/parents)? (earning)
· Do you feel confident about your life as it pertains to money? (spending/saving/investing)
· What keeps you up at night around money? (retirement)
· What do you feel you understand the least about your financial life? (taxes)
· If you could wave a wand and solve your biggest concern around money, what would that be? (the plan)
· What do you understand about what happens to your money and what you own when you pass from this life? (estate planning)
Really, listen to her answers. The questions reflect our work with clients and her answer may be very different from his answer. Make an effort to understand both answers. These women could be your colleague, employee, boss, mom, sister, partner, daughter, a beloved aunt or your grandmother. Women are the threads holding the fabric of society together in many cases. Raise women up by helping them thread money concepts and realities in everything they do.
Research for this article included (and where you can learn more):
https://19thnews.org/2021/04/women-small-businesses-loan/
https://wiw-report.s3.amazonaws.com/Women_in_the_Workplace_2020.pdf
https://fas.org/sgp/crs/misc/R45791.pdf
Bonnie A. Sewell, CFP®, CDFA™, AIF®, CEPA®, is RETIRED.
