Women tend to have greater long-term care needs than men, so they should be more proactive about retirement and long-term care planning. Unfortunately, women are taking a backseat when it comes to major financial decisions, and it could be putting their futures at risk.
Women Are Taking a Passive Role in Long-Term Planning
Research shows that in husband-wife households, the husband is considered the more knowledgeable of the two when it comes to finances 56% of the time. Among households in the top 1% of net worth, the husband is considered more knowledgeable 90% of the time. Between 1992 and 2016, the percentage of households in which the husband was more knowledgeable about finances actually increased, indicating that women are actually regressing on this point despite progress in education and careers.
This imbalance could hurt women in the long run. A Bank of America study found that 94% of women believe they’ll be responsible for their finances at some point in their lives, but only 28% feel empowered to act. Furthermore, while the majority of women are confident when it comes to day-to-day tasks like paying bills and managing a budget, far fewer women are confident about long-term goals like managing investments. Retirement planning is a common pain point; 40% of women are not confident about staying comfortable in retirement, and only 32% of women say they’re confident about taking care of aging parents.
According to McKinsey & Company, women control one-third of U.S. household financial assets. That’s more than $10 trillion. With women’s many advances in income, workplace leadership, and control of wealth, it’s easy to forget that women only gained financial equity under the law about 50 years ago! Until 1974, women applying for credit could be required to have a male cosigner, according to Kiplinger. Financial roles and responsibilities within a marriage often model the way roles were filled by parents, explaining some of the passive behaviors that persist today.
Women Live Longer, Often Outliving Their Spouse
According to the CDC, the average life expectancy for men is 74.8 years and the average life expectancy for women is 80.2 years. When you add in the fact that many women are younger than their husbands, it becomes clear a woman is likely to outlive her spouse by a significant period of time.
A woman who has been recently widowed may find the couple’s assets have been depleted by the spouse’s health care and long-term care expenses, leaving even less to fund her care needs. Furthermore, an individual can only collect survivor Social Security benefits OR retirement Social Security benefits, not both. As a result, a widow may receive substantially less than the couple received when both spouses were alive.
Women Are More Likely to Need Long-Term Care
Women tend to outlive men and live alone in their old age, so they tend to have greater long-term care needs. According to the Administration for Community Living, a person who’s turning 65 today has close to a 70% chance of needing long-term care at some point, with men needing care for an average of 2.2 years and women needing care for an average of 3.7 years.
The female spouse often provides care for the male spouse for as long as possible. Unfortunately, many women will end up alone because they are divorced, never married, or widowed. There is no in-home caregiver for these women needing long-term care.
Help Your Clients Plan for Long-Term Care Needs
Remind married couples of the importance of planning for the needs of the surviving spouse. Also point out that most carriers offer considerable premium discounts when both spouses have long-term care coverage. For individuals who are single or divorced – and especially for women – encourage them to plan for their long-term care needs.
Count on DIS to be your advisor as you guide women and couples through the process of planning for the likely possibility of needing long-term care. We are here to help you through all aspects of the long-term care insurance sale. Let’s get started. Call DIS and download The Ultimate LTCI Sales Script here.