Category Archives: Women and Finance

Are You Planning on Living to 100?
YOU SHOULD BE

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Sometimes the Spirit moves me to attend a weekday mass. One thing that is different when I attend mass during the week is the age population. For obvious reasons, there are no young families and typically no working age adults. 

What is GLARINGLY different, while not surprising, is the GENDER of those age 70+ in attendance. 

You guessed it – WOMEN.

Women live longer than men. It’s that simple.

But when it comes to the financial implications of this fact for women, it’s not simple at all.

Merrill Lynch put out a study back in 2017 about women and financial wellness. Despite the fact that 2017 is feeling like a lifetime ago these days, there are some great points and statistics that I always refer back to. 

  • 42%  of women fear they will run out of money by age 80. This rises to 60% if they live to 100.
  • 41% of women report their biggest financial regret is not investing more.
  • 60% say that not having the knowledge to invest is their #1 barrier.
  • 87% feel basic financial management should be a standard part of the HS curriculum (I could not agree more).
  • 41% of mothers report that becoming a mom made it harder to advance their career.
  • 2/3rds of elder care for family members is provided by women. 

These last two points in particular point to the paradox that while we often find great joy and sense of purpose in providing care at these various life stages, and would “never trade that time for anything” (I speak from experience on both), it can also be extremely stressful and challenge us financially, both now and in our future.

Adding to this is the fact that some of us may be taking care of partners that age before us, and our mutual savings begins to diminish quickly on care needs arising for them, leaving less for the remaining partner to live out their life comfortably.

Finally, the study also reported almost 30% of women ages 30 to 44, which are important saving years due to the power of compounding, say they have not started planning at all for their future.

As a woman, you should be planning for your financial support at least through age 95.

And retirement and longevity planning shouldn’t be starting AT RETIREMENT, it should be well before, while you are earning an income and have time to make adjustments as needed.

There are always tradeoffs between our lives personally, professionally, financially and emotionally. Finding the balance between all of them is the ongoing challenge we as women continue to face.

My Favorite Quotes

This quote from the study highlights one of the reasons I particularly enjoy working with women in my practice.

“Women make more values-based decisions for themselves and their families, rather than just going for the bottom line. When you bring values into the conversation, it makes all the difference”. 

-Jeanette Schneider, Senior VP at US Trust

Introducing the “Pink Tax”…and why it is worth being aware of.

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Have you ever heard of the Pink Tax? This is not an actual tax levied by the state or federal government, but rather refers to what has been described as “ a discriminatory pricing practice” that lends itself to charging women more for “substantially similar” products and services. That part is real. 

If you have daughters, you’ve probably uttered the words, “geez, girls are expensive”, at least once. 

Health and beauty care products, kids’ toys, clothing, dry cleaning and car repair services are found to be the biggest offenders of the pink tax. 

Not for nothing, but in my house, regardless of gender, we don’t know what is legit for car repairs. But I suppose, “generally speaking”, men have (or are perceived to have) more general car knowledge and may be less likely to be quoted an unreasonable price. 

Toy pricing came as a surprise to me. One example cited in the piece I read was a blue bike helmet costing less than the same helmet in pink. Same manufacturer, same product, different color. Maybe pink decals cost more? 

Probably not. 

The State of New York actually passed a “Pink Tax Ban” in 2020, prohibiting this practice and requiring certain service providers to present price lists for standard services upon request. 

“Upon request” being the key words there. I’m not sure how the state will effectively police this. Time will tell, but it’s a start. 

The point I want to make on this topic is this:
I believe the best defense for stuff like this is a good offense. 

How do you create a good offense? 

AWARENESS. Through awareness you create knowledge and power, and that goes for anything. 

As women, are we always unaware we are paying more? Of course not. Sometimes we make the choice to. I am fully aware I am paying more for my “spa” shampoo, which is why I treasure every drop and don’t share it with the men in my house, but I do have the choice to buy a lower cost product and still get my hair clean. 

If you’ve never heard of the pink tax before this, now you are aware that it is actually a thing and you can be an informed consumer. Granted, you probably don’t want to smell like Axe body spray or Old Spice just to pay a lower price, but you can still make choices of one product over another or ask informed questions of a service provider. 

Be AWARE. Stay INFORMED. The best defense is a good OFFENSE. 

Financial Fitness Tip

I have been involved with a wonderful organization for a number of years called The Fresh Air Fund. April is financial literacy month and they asked me to sit on a panel with some teens to talk about what I do for a living as they learned about financial topics. 

Kudos to The Fresh Air Fund for putting this program together for their teens!

They shared a short You Tube video offering some basic, and some not so basic, financial education in an easy to understand format, which I am always a big fan of. 

Take some time to view the video and share it with others you think might benefit!

My Favorite Quotes

Since it’s financial literacy month, I am sharing a quote that promotes one of the single most important tenets of growing your wealth over time:

“Do not save what is left after spending. Spend what is left after saving”

– Warren Buffet (and me)

One Woman Really CAN Reshape the World

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In honor of the late Supreme Court Justice Ruth Bader Ginsburg, I’ve decided to share my newsletter from back in January where I made “art imitating life” observations of how far we’ve come, and still have to go, in moving the educational, professional and financial plight of all women forward.

RBG fought tirelessly for her own rights as a young woman to attend law school and, despite finishing top in her class at Columbia Law, still encountered gender discrimination while seeking employment. Of course she did, it was 1959! If not for her and many other female pioneers like her, I would not be sitting here today as owner of my own financial advisory firm.

Thank you RBG, for your tireless fight.

RBG and Mrs. Maisel would probably have been great friends!

Please continue reading for the post I shared in January:

Have you been watching Amazon’s hit comedy “The Marvelous Mrs. Maisel”? Do you love it? I have-and I DO! It’s simple. It’s funny. I can fall asleep after it is over with a light heart. I binge watched Season 3 over the holidays.

The story line focuses on Miriam “Midge” Maisel, a NYC housewife in the late 1950s/early 1960s who discovers she has a knack for stand-up comedy and begins actively pursuing a career. To keep it simple without need of spoiler alerts, her husband can’t handle her success, has an affair with his secretary and they separate.

I love that it brings current day recognition to the female pioneers that paved the way for the careers we women pursue today (although still today, this is not without challenges and/or risks to our financial well-being, but that’s a topic for another newsletter).

“Mrs. Maisel” depicts, in a “making fun of what used to be” sort of way, the early phases of breaking the mold during a time that was probably anything but fun for women choosing this path. I love that it makes me recognize and appreciate how much things have changed for women.   

Yet after watching an episode of Season 3, I began to wonder if in some ways, despite the 1960’s setting, “Mrs. Maisel” is also current day art imitating life when it comes to many women and their finances. As Midge gains earning power, she washes her hands of money management and leaves it in the trusted hands of her talent manager Susie, who fails miserably. And then, of all people, Susie goes to Midge’s EX-HUSBAND, begging him to take over Midge’s finances. So Midge has a successful career and is taking on the world…but will still be relying on her ex-husband to handle her money.

Unusual for the times? No, not at all. Women weren’t even allowed to apply for their own credit cards until 1974! But how much has truly changed in regards to women being fully engaged in their finances?

Certainly, there have been HUGE strides over the decades in so many areas for women, but there are still inroads that we need to make for our financial security and that of our families.

I leave you with this question:

On a scale of 1-10, how “in the loop” are you in the understanding of your personal or family finances?

If you are not an 8 or above, I encourage you to become more engaged, ask questions if you don’t understand, and make 2020 the year that you become your own pioneer in financial empowerment.

Financial Fitness Tip

This month I helped a client in understanding her right to appeal the IRMAA surcharge she was paying for her Medicare.

The Income Related Monthly Adjustment Amount (IRMAA) is an amount that is added on top of the base premiums for Medicare. Those that earn over a certain amount are subject to this surcharge.  More and more folks are affected by this as more and more folks work past age 65, but there are certain times that this surcharge can be successfully repealed.

Much to her delight, she easily won her appeal and now pays significantly less per month for her Medicare premiums!

My Favorite Things: Block Island

I have three passionate football players in my house, and a youth football coach, so when it was announced that football would not be allowed this Fall, it was time to make lemonade out of lemons.

We took a “glass half full” September trip to Block Island. We all have that place we hold near and dear to our hearts, our “happy place” that holds so many memories. In our hearts, it feels like it’s a living, breathing object. This is what Block Island is for me. I have been visiting since I was 6 -years old, and now my children have been there since as early as 1-month old!

Little known fact: Block Island’s official town name is “New Shoreham” and it’s where I derived the name of my firm, New Shore Financial. I had to be sure to incorporate my happy place into my passion!

This Triple Scores You a Homerun

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The Basics of an HSA

An HSA is a savings account for health care expenses tied to what’s known as a High Deductible Health Plan, often offered as a health care option through your employer. This type of account is different from a Flexible Spending Account (FSA), where you can lose any unused portion of your dollars set aside for a given year.

The money set aside in an HSA stays with you forever, similar to how your 401(k) would work. So even if you leave your current employer, your HSA dollars go with you. And like your 401(k), you can invest them.

You own the assets in your HSA forever.

How the high deductible health plan works and whether it is right for your circumstances is a newsletter for another time, but many who currently have this type of plan with an HSA don’t understand the benefits of the HSA in and of itself.

Triple Tax Advantaged

  1. Your contributions are pre-tax, so they lower your taxable income in the year they are made. Think of this tax savings in the same way you think of your pre-tax 401(k) contributions. 
     
  2. You can invest your contributions and they will grow tax free, meaning any growth on the account is also NOT taxable. This works like a Roth IRA in this regard, so for high income earners who are phased out of making Roth contributions, this is an excellent tax savings vehicle that offers the same tax free growth one gets from a Roth. 
     
  3. Withdrawals, AS LONG AS USED FOR QUALIFIED MEDICAL EXPENSES, are 100% tax free.

Boom!!! A Triple Tax Homerun!

Now the caveat is that although you can make contributions to this account on an annual basis to pay for current medical expenses, the goal is to instead pay out of pocket and invest that savings, like you would any other qualified savings account, allowing it to grow tax free for as many years as possible.

With our ever increasing health care costs, this is a great tool for our future selves to have a bucket of tax free money to help cover our future medical care costs.

Is “The Marvelous Mrs. Maisel” Art Imitating Life in 1960 or 2020?

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Have you been watching Amazon’s hit comedy “The Marvelous Mrs. Maisel”? Do you love it? I have-and I DO! It’s simple. It’s funny. I can fall asleep after it is over with a light heart. I binge watched Season 3 over the holidays.

The story line focuses on Miriam “Midge” Maisel, a NYC housewife in the late 1950s/early 1960s who discovers she has a knack for stand-up comedy and begins actively pursuing a career. To keep it simple without need of spoiler alerts, her husband can’t handle her success, has an affair with his secretary and they separate.

I love that it brings current day recognition to the female pioneers that paved the way for the careers we women pursue today (although still today, this is not without challenges and/or risks to our financial well-being, but that’s a topic for another newsletter).

“Mrs. Maisel” depicts, in a “making fun of what used to be” sort of way, the early phases of breaking the mold during a time that was probably anything but fun for women choosing this path. I love that it makes me recognize and appreciate how much things have changed for women.

Yet after watching an episode of Season 3, I began to wonder if in some ways, despite the 1960’s setting, “Mrs. Maisel” is also current day art imitating life when it comes to many women and their finances. As Midge gains earning power, she washes her hands of money management and leaves it in the trusted hands of her talent manager Susie, who fails miserably. And then, of all people, Susie goes to Midge’s EX-HUSBAND, begging him to take over Midge’s finances. So Midge has a successful career and is taking on the world…but will still be relying on her ex-husband to handle her money.

Unusual for the times? No, not at all. Women weren’t even allowed to apply for their own credit cards until 1974! But how much has truly changed in regards to women being fully engaged in their finances?

Certainly, there have been HUGE strides over the decades in so many areas for women, but there are still inroads that we need to make for our financial security and that of our families.

I leave you with this question:

On a scale of 1-10, how “in the loop” are you in the understanding of your personal or family finances?

If you are not an 8 or above, I encourage you to become more engaged, ask questions if you don’t understand, and make 2020 the year that you become your own pioneer in financial empowerment.