Widowhood

Overcoming "Bag Lady" Anxieties

By Candace Bahr, CEA, CDFA

Today's women are no longer the weaker sex financially. Recent census figures show an unprecedented societal and economic shift. About 27 percent of married households identify the woman as the head of household, earning a greater income than her husband. The number of women earning $100,000 or more has quadrupled in the last decade.

Women also are building wealth faster than ever before. According to the Federal Reserve, 47 percent of wealthy Americans are women. Private Banker International newsletter says that women accounted for half of all stock market investors in 2003. About 70 percent of new businesses are started by women, and women-owned businesses employ one of every four U. S. workers, more than all of the Fortune 500 companies combined.

While impressive, those numbers pale in comparison to what is likely to be the largest wealth transfer in history, as baby boomer women outlive their parents, brothers and husbands. By 2010, women will control more than 60 percent of the wealth in the U.S., and over the next few decades, $12.5 trillion will pass into women's hands. On average, baby boomer women will be likely to be widowed at age 67 and outlive their spouses by 15 to 18 years. There's a 90 percent chance that most women will need to manage money on their own at some point in their lives.

Here's the rub. Regardless of the fact that women are more educated, more involved in financial decisions and controlling more wealth than ever before, 90 percent of women don't feel financially secure, according to a 2006 survey by Allianz. About half of women feared becoming bag ladies, and even those earning $100,000 or more were concerned about losing all of their money and becoming indigent.

This irrational fear that money could evaporate is anchored in inexperience.

Lack of knowledge is the biggest barrier to women getting involved in managing their investments, more than four times the barrier of lack of time, the Allianz study showed. Now is the time to develop the confidence and knowledge you will need to make the decisions that will affect your family's financial well-being in the future.

Fortunately, for many women, financial management is not a mystery. Women who worked with financial advisers reported feeling more responsible, confident and optimistic, Allianz reports. If you are a baby boomer woman, don't wait. Now is the time to get professional help and guidance. As you improve your financial knowledge, you will be ready to face the future, whatever it brings.

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