Women and ‘The Great Wealth Transfer’
By Susan Lindeque, CEO, Avestix
In a recent interview, I mentioned that although women have traditionally assumed the role of supporting players in managing wealth, even their own — that is about to change.
“I strongly believe we are entering the best wealth generation decade of our lives,” I told the interviewer. “The next 10 years will be pivotal for a lot of women, where they can generate a lot of wealth.”
As I explained, for many women, much of this wealth will come in the form of bulk distributions they will earn as they take their rightful place in receiving a share of the so-called “great wealth transfer.”
That transfer — a historically unprecedented handoff of an estimated $90 trillion that Baby Boomers will be leaving to their heirs — will have an especially profound impact because analysts estimate that at least one-third of it will go to women.
As Avestix reminded readers in our recently released Avestix eBook, “The great wealth transfer will likely make succeeding generations the wealthiest Americans in history.” Not only will this transference of wealth empower a new generation of Americans, but it will also likely help usher in the wealthiest generation of women investors ever.
However, it remains to be seen how women choose to manage the wealth they inherit. Study after study has documented that most women lack confidence in managing their money.
‘Financial Insecurity,’ Opportunities and Stress
A recent study from Intuit is typical: It determined that “more than half (55 percent) of women feel uncertain about where to begin their financial journey, compared to just 49 percent of men.” This lack of confidence often translates into struggles with saving for retirement, reducing debt, and managing everyday expenses.” The result: “financial insecurity … shapes their life choices, limits their opportunities, and fuels stress.”
For many women, the lack of confidence and financial insecurity will impact how they prepare to both give and receive their portions of the forthcoming great wealth transfer.
In The 'Great Wealth Transfer': What is it and how can women make the most of it?,
The World Economic Forum (WEF) found that, while nearly 90 percent of women “define the purpose of wealth as a means to gain financial security and the freedom to live the life they want, and 85 [percent] view it as a way to achieve a better quality of life.” Only a portion of them appear to be comfortable in planning how to manage their forthcoming nest eggs.
“Despite nearly half of American women anticipating receiving an inheritance in the next 10 years,” the WEF wrote, “women face significant obstacles to determining how wealth is transferred across generations.”
The solution, at least according to the WEF, begins with “talking with loved ones and planning ahead … Having a transparent conversation with family members and developing a clear plan can make all the difference between the legacy of love and care, and one of potential hurt and confusion.”
But, the WEF acknowledges, such conversations “can be extremely uncomfortable, particularly as givers navigate family priorities beyond finances.” Enlisting financial professionals who “can help take the emotion out of the process, create a safe and open environment for families to discuss their values and goals, educate and guide them in creation of the wealth transfer plan” may help.
And while “the role of a financial adviser is as important as ever for women navigating the Great Wealth Transfer,” the WEF found that only [12 percent] have discussed generational wealth transfer with a financial adviser,” which is surprising given that 54 percent said “working with financial professionals would make it easier to plan for and reach family consensus around issues of wealth transfer and inheritance.”
How Avestix Can Help
Just as men have their financial planning priorities, so do women, who not only tend to live longer than men but also place greater importance on striking a balance between meeting their own needs and the needs of their loved ones.
Financial advisers who understand those differences — the seemingly-conflicting goals of saving for retirement, paying off debt and caring for family members — can help women navigate their financial planning.
Avestix, a woman-led investment and wealth firm that is redefining financial empowerment through cutting-edge technology and a user-centric approach, can help. If you’re a woman seeking financial advice and counsel, we are here to help.
Contact Avestix today.
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