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What's Different Financially for Women?

Tips for powering through obstacles on your road to financial freedom. PLUS: Watch a video featuring one mom's answer to work-life balance.

By Kerry Hannon

CHRISTI WARREN IS NOT ANXIOUS ABOUT INVESTING, or uncomfortable talking about it. “I’m just super busy,” says Warren, 61, a resident of Naples, Florida. “It’s not ‘Oh, my gosh, I’m a woman; I’m not very good at math.’ The fact is, I’m quite good at math. It’s that I work 11- to 12-hour days running my own practice as a veterinary ophthalmologist. I have enough on my plate.”

Warren is describing one of the biggest challenges many women face when it comes to money. There’s a lot to juggle between work, caring for kids and relatives, and managing the household budget, among other demands. Thinking about investing, saving for retirement and other financial goals often gets lost in the shuffle.

Women can’t afford to ignore these issues, says Lorna Sabbia, head of Retirement & Personal Wealth Solutions at Bank of America. “There’s a huge wealth gap between men and women, caused by such things as the pay gap, and the fact that women tend to spend more time out of the workforce caring for family. Our saving and investing are impacted by these things, which makes it all the more important for us to take control of our finances early on.”

Warren realized she needed to pay closer attention to her finances when, after a number of years of investing, she realized “I wasn’t really making money. I would have done as well if I had just put cash under my mattress.” It turns out Warren had been paying almost as much in fees as she’d been making on her investments.

A cross-country move from Arizona to Florida provided her with a fresh start. Working with a new financial advisor, she shifted her investments into a range of low-fee options, and she’s now much more comfortable with her returns.

That new advisor, Mitch McLendon, of Merrill Lynch Wealth Management, has been a valuable sounding board for Warren’s business decisions as well as her more personal long-term goals. He has regularly offered advice on everything from setting up loan financing to talking through the various choices she might have as she phases into retirement and can focus on giving back as a volunteer to various animal charities close to her heart.

Photo of Christi Warren, veterinary ophthalmologist, holding a dog.One of the biggest challenges many women face when it comes to money: “I’m just super busy. I work 11- to 12-hour days. I have enough on my plate.” —Christi Warren, veterinary ophthalmologist

Saving and investing more

Time crunch aside, all too often the financial deck is stacked against women of all ages. For starters, the pay gap remains a stubborn stumbling block. In 2018, women earned 85% of what men earned, according to a Pew Research Center analysis.1 “Very few women push back on salary offers compared to men,” Sabbia says. “That has huge implications when it comes to your ability to save.” Boning up on negotiating skills can help turn the tables.

Complicating matters, the career breaks many women take to care for family give them fewer years to fund a retirement plan. Career interruptions also cause women to lose potential raises and can reduce how much they’ll collect from Social Security. When you earn less, you have less to save—and the natural inclination is to guard it by choosing investments that are more conservative. Over the long haul, those investments tend to have a lower growth potential.

“As a result, women—who have a longer life to look forward to and fund—can end up with smaller nest eggs, and they deeply regret not having invested more,” says Kirstin Hill, chief operating officer at Merrill Lynch Wealth Management. “Something as simple as making sure we take advantage of critical wealth escalators, like company matches in our 401(k)s, in the same way that men do, can help us become more financially secure.

“So can working with an advisor who understands women’s different financial journeys and can help you create a portfolio that has the potential to last your lifetime,” she adds. “Financial independence is a goal worth pursuing. It can unlock doors for us to achieve all of our aspirations, as professionals, as entrepreneurs, as policy influencers, as single women, as mothers, as partners and spouses.”


Watch the video
Learn about Lisa Young’s approach to work-life balance and the tradeoffs she’s made.

Juggling work and family

Lisa Young, 44, a transportation planner based in Fullerton, California, has navigated ups and downs in seeking an ideal work-life balance. She was on an upward trajectory in her career when she and her husband had their two children. “My company let me work part-time, but I took a pay hit. And sometimes it is hard to advance when you’re not in the office full-time,” she says. Not one to be held back by financial challenges or to jettison her career ambitions during her peak earning years, she founded her own consulting business, TransLink Consulting, LLC, out of a home office.

In truth, she was in a better place financially than many moms who step back from the workforce to raise their kids. She’d kept her hand in and only taken a step back to part-time. Plus, she had Sammie Kothari Peng, her advisor at Merrill Lynch Wealth Management, by her side. Sammie helped guide Lisa financially and provided encouragement as she made the leap to becoming her own boss in 2015.

“Very few women push back on salary offers compared to men. That has huge implications when it comes to the wage gap and your ability to save.”—Lorna Sabbia, head of Retirement & Personal Wealth Solutions, Bank of America

Now five years old, her company has grown immensely, and she’s making considerably more than she was as someone else’s employee. “Right now, I’m in a good place. I want to be a role model for my kids—especially my daughter—to show her that you can work hard and be successful and also do it on your terms.”

Not every mother chooses to take a career break, of course—and for those who do, becoming an entrepreneur isn’t always an option. But there are other ways to compensate for the financial impact of taking a time out for family. “Familiarize yourself with resources, such as 401(k)s and health savings accounts, that can offer tax advantages as you work toward building a more secure future. And develop a smart strategy for maximizing your income when you claim Social Security,” recommends Sabbia. It also helps to find an advisor who understands women’s different life journeys—“someone who really gets how things like the wage gap and career breaks can impact your progress toward your goals and who can suggest ways to compensate for those challenges,” she suggests.

That impact can add up to a significant loss in income, when you factor in both career breaks to raise your children and care for an aging spouse or parents, according to “Women & Financial Wellness: Beyond the Bottom Line,” a 2017 Merrill/Age Wave study. And women are three times more likely than men to retire earlier than expected so they can become a family caregiver, notes Cynthia Hutchins, director of financial gerontology at Bank of America.

The costs of caregiving

Retirement was recently on the back burner for Wyletter Whaley, 59, an attorney based in Dallas, Texas. When her mother was diagnosed with congestive heart failure eight years ago, Whaley became actively involved in her mother’s caregiving. Seven years ago she made the decision to move her mom to a nearby assisted living community due to her mom’s growing care needs. It came with a hefty price tag. Whaley’s outlay for her mother’s care ran between $3,500 and $4,200 each month.

Photo of Kirstin Hill, chief operating officer, Merrill Lynch Wealth Management, speaking at a podium.“Women—who have a longer life to look forward to and fund—can end up with smaller nest eggs, and they deeply regret not having invested more.”—Kirstin Hill, chief operating officer, Merrill Lynch Wealth Management

That unexpected responsibility, plus her marriage shortly before, have had a seismic impact on her financial footing. “I went from being a single professional with no one to consider but myself and a lot of disposable cash, to supporting Mom and recently becoming the primary breadwinner in my marriage when my husband and I decided it was time for him to start his own general contractor company,” Whaley says.

Like Young and Warren, Whaley doesn’t go it alone. For more than a dozen years, Patricia Barksdale, her Merrill Lynch Financial Advisor, has played a role in helping her navigate the financial aspect of caregiving and more. Barksdale has subtly boosted Whaley’s investing swagger by encouraging her to ask questions and push to learn more. “Today, I’m confident when it comes to investing, but I’m not a risk taker.”

Not surprisingly, she’s also beginning to take stock of her own future health-care expenditures. Her mother passed away a year and a half ago, but Whaley’s first-hand experience paying for her mother’s care has pushed her to shop for her own long-term-care insurance. “I had planned to self-fund, but I know now that I’d like to have a safety blanket,” she says. “I don’t have any children. My mom had me to look after her, but I don’t have a me.”

Taking charge

Whaley, Warren and Young have never let the financial challenges they faced stop them from pursuing their goals. For all three, understanding the challenges they faced was the first step in finding ways to overcome them.

What’s the key takeaway from all their stories—the one thing that empowered them to reach for their success? “It’s soul-searching,” says Sabbia. “Ask yourself: What’s your money for? What are your priorities? Figure out how much you might need in order to retire early or to pay for your kids’ college tuition, and start working toward those goals. And don’t feel you have to go it alone,” she adds. “Talk about money with your friends and family. Maybe even consult a financial advisor. You don’t have to be perfect or know everything before you begin investing,” she says. “Just start.”

There’s too much at stake not to.

Kerry Hannon is the best-selling and award-winning author of a dozen books, including Money Confidence: Really Smart Financial Moves for Newly Single Women, Great Jobs for Everyone 50+: Finding Work That Keeps You Happy and Healthy...and Pays the Bills, Suddenly Single: Money Skills for Divorcees and Widows and 10-Minute Guide to Retirement for Women. Her latest book, Never Too Old to Get Rich: The Entrepreneur's Guide to Starting a Business Mid-Life, was published by John Wiley & Sons in 2019.

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1 Pew Research Center, 2019,

The case study is intended to illustrate products and services available through Merrill. Case studies do not necessarily represent the experiences of other clients, nor do they indicate future performance. Investment results may vary. The investment strategies discussed are not appropriate for every investor and should be considered given a person’s investment objectives, financial situation and particular needs.


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