275 | Protecting Women’s Wealth

Hilary Hendershott: Well, hey, Money Lover. Welcome to another episode of the show. Today’s topic is one that I get really fired up about and that is protecting women’s wealth. And all you dudes, before you tune out, know that while I speak mostly to issues that impact women in greater ways than men, most of these issues are definitely worthwhile for you to be aware of too, whether it’s for protecting your own wealth or for supporting your partners, daughters, sisters, nieces, or any other women in your life. Protecting wealth isn’t a new conversation around here. I’ve spent the last few episodes talking about different ways to protect your wealth because I know it’s not the most exciting topic, but it’s an important one.

[00:00:39] In fact, Protect is the seventh step in my 7 Steps to Wealth framework, and it’s a step that so many people neglect. And unfortunately, I’ve seen that mistake unravel so many personal fortunes. Here’s a quick refresher of what we’ve covered so far. In episode 272 with Béa Victoria Albina, we talked about protecting your energy and resources by not giving more than you’re able to. Then in episodes 273 with Kara Foster and 274 with Melanie Lockert, we were talking about protecting wealth in your relationship, whether that’s for married or unmarried partners. If you missed those episodes, catch up at the links in the show notes or just scroll back a little in your podcast player.

[00:01:24] Today, we’re going to wrap up our unofficial mini-series with an episode about protecting women’s wealth regardless of your marital status. For too long, financial advice was tailored to men, by men, and that is actually one of the reasons I started my firm, Hendershott Wealth Management. We believe that making the most of your money should not be a struggle, and that opportunity shouldn’t be reserved for the good ol’ boys’ clubs typically seen in the wealth management space. When you get financial advice from a trusted professional, it really should not feel like you’re being talked down to or made to think less of yourself. It should feel like an easy, natural conversation with you as the heroine because that’s what you are when it comes to building your wealth.

[00:02:09] Before we really dive in, I want to address a strongly held belief amongst women and, honestly, the rest of society, that has sabotaged women’s wealth forever. And that is that a good woman gives what she has away. We have been putting women on pedestals for centuries for giving away their time, energy, and their money. And frankly, we love it even more when they give away more than they can afford to. As you know, one of the biggest compliments a woman can be given is that she’d give you the shirt off her back.

[00:03:24] And I’ve said in previous conversations, most recently with Béa Albina here on the podcast, “Girlfriend, keep your shirt on.” It’s time we stop putting women on a pedestal for giving their wealth away and it’s time for women themselves to stop eschewing wealth. Money is neutral and wealth is infinite. We’re not playing a zero-sum game. You earning and building wealth is not you taking it away from someone else. It’s actually you creating value in the world for other people. Money earned is a measure of value produced for someone else. That’s the beautiful side of free trade and entrepreneurialism. You’re not greedy, wrong, or bad by creating, earning, asking for, saving, and investing to build wealth.

[00:04:11] You are filling yourself up, which includes filling your bank accounts up. That’s beautiful. It’s your birthright and it’s an act of feminist rebellion. We owe it to our sisters, our daughters, our friends, and our nieces to let them witness it and live into it. No one ever complains that the oak tree takes too much water. And in the same vein, there is no such thing as you having too much money. At Hendershott Wealth, we’re committed to creating a future where you are thriving. To do that, you do have to protect your happiness, your health, and you need to protect your wealth for generations to come.

[00:04:48] All right. We’re getting into it. When it comes to financial best practices, we believe you and yours are best served by three things. One, establishing personal goals and timelines and crafting a financial plan for achieving them. Two, building and maintaining a low-cost, globally diversified stock market investment portfolio. And three, sticking to your plans and protecting your portfolio over time, and ignoring the mid-pursuit distractions. Staying focused.

[00:05:17] So let’s talk about some of the specific considerations for women. First up, longevity. As we advise women about their wealth, some assumptions are actuarial or data-driven. For example, time-tested statistics have long found that in aggregate, women tend to outlive men. In fact, the 2022 data from the U.S. Centers for Disease Control says a 50-year-old woman’s life expectancy is 82.8 years, while a 50-year-old man’s is 79.1. Girls born in 2022 are projected to live 80.2 years versus 74.8 for boys. Of course, life happens and we all know we can’t predict how long we’ll be around, but women are more likely to become the surviving spouse. This is, of course, hard for me to think about because I married a man who’s 12 years my senior.

[00:06:11] So, statistically speaking, I’m likely to be widowed for 15 years and I don’t like it. But it’s true. It’s hard to think about. And he and I have set up our lives to take care of the other person when one of us is no longer on the planet. So, financially, it’ll work out for us. And longevity isn’t the only wealth challenge many women face. Our financial well-being is also vulnerable to extra threats related to work-life balance. Aren’t we lucky, ladies, we have all these extra threats? Pew Research indicates women might end up taking on the heavier load when it comes to child-rearing and household management responsibilities, as well as caring for aging parents. This, in turn, can lead to shorter or lower-paying careers.

[00:06:55] And again, just like everything I say, it’s not universal, right? Hopefully, gender inequities are fading over time, but traditionally women are default caregivers across generations. And that has often translated into fewer wealth-building opportunities for women. We could go into more regarding this economic outcome, specifically around whether a woman’s reduced earning power is a result of choice or necessity, nature or nurture, biology or biases. And, you know, most likely it’s a messy mix of all of those. And regardless of the cause, the financial results are clear. If you are the “lower-earning spouse”, and that’s per the Social Security Administration’s terminology, and regardless of your gender, your circumstances merit extra financial planning to ensure you maintain an equal stake in your household’s total wealth–today, and as you age.

[00:07:49] So, let’s talk about how to stake that claim because you absolutely deserve it. One of the most important wealth-building and protecting practices to work on is self-empowerment. It really all starts with you and your relationship with you and your willingness to advocate for you. Even if you’re not in charge of your household’s wealth management–and I don’t think you have to be–everyone delegates, right? But you at least need to know what’s up with the finances. Letting someone else take the reins entirely is one of the biggest mistakes I see women make. In fact, one of my very first guests on this show back in 2016 and I won’t name names, she said outright, “I let my husband handle all the money.” And I pushed back on her. I said, “You know, that’s probably not a great idea. Don’t you want to know what’s happening with the money you earned?”

[00:08:35] And she basically said, “No. That advice is for people who don’t have good spouses. I trust my guy. I’ve delegated this part of my life, end of story.” I actually was really conflicted about whether to air that part of the interview, but I did. And now, fast forward nine years, that woman is divorced, no longer even running the business she was running at that time, that business actually, which landed her in Forbes, which is why I interviewed her. And she’s moved from a major metropolis to a really small town. And she’s living in an apartment with far fewer bedrooms than she has children. So, I, of course, don’t know the balance of her bank accounts today, but she talks online frequently about how dire her financial situation has become. Please don’t let that happen to you. Repeat after me. “No one cares more about your money than you.”

[00:09:25] So, even if–and when–you hire a comprehensive financial advisor to help you strategize and manage your wealth, remember this: You are your own chief financial officer. You need to know the answers to questions like, “What’s your current net worth? Which banks or brokerages house that wealth and how can you access those accounts? What are your household expenses and debts?” You need a list of the credit cards that both you and your partner have in your names and use on a daily basis and even the ones you don’t use on a daily basis and you need the log ins to those accounts.

[00:09:59] You need to know where the important financial documents are. I scan all of mine and I keep them in Box.com. And I’m not shy about telling people I love where they can find those documents if I’m not around. You need to know who are your primary financial contacts like your advisor, your estate planning attorney, insurance agent, your accountant, and how do you get in touch with those people as required or desired. Only once you’re fully in charge of your wealth can you find the right experts to help you manage it. So, advocate for your own knowledge. Keep yourself in the driver’s seat. You don’t need a master’s degree or a PhD in finance to manage this stuff.

[00:10:38] Okay. Let’s talk about retirement and healthcare costs. And this is heading back to the conversation on longevity. When you and your financial advisor are crunching your retirement planning numbers, make sure you factor in how long the surviving spouse, in this case, we’re considering that could be you, could likely live. As I shared in my case, I’m sort of thinking that the likelihood and like I said, statistically speaking, that’s going to be 15 years for me and how much that part of life will cost you. You’re likely to have increased healthcare costs in the final years of life, including potentially needing to secure long-term care resources.

[00:11:14] The vast majority of long-term care insurance policies are now priced far too high to be affordable by any reasonable person. We’re actually recommending our clients, for the most part, self-insure, meaning set aside a bucket of money to pay for the expenses outright because you’re likely to need to pay out-of-pocket. The range of how expensive this can be is vast. It can be anywhere from easily affordable for those with modest savings to approaching financially devastating. I know that’s hard to hear, but I can tell you most people who have planned for some extra expenses in those years come out okay despite what you may read in the media.

[00:12:07] Okay. Let’s talk about pensions. At some point, your pension is going to start distributing to you. So, if it’s your spouse’s pension, is your well-being considered in planning for any pensions you have? For example, your spouse could take their pension in a form that offers higher upfront payouts while they’re alive but lacks survivor benefits. Is that okay with you? And will you have enough? This should be addressed.

[00:12:35] Social Security benefits should be thought about in a similar fashion. I came across an article a while back called “The Big Thing Clients Don’t Get About Social Security Spousal Benefits”, which you can find a link to that article in the show notes, and it described how the timing of when and how a higher income earner claims their benefits can impact the lower earners’ eligibility and benefits calculation for spousal benefits. So, do yourself a favor and make sure your interests are considered equally in these decisions.

[00:13:14] And please, please, please pay attention to the beneficiaries on all of your accounts. Update them consistently and continuously. You just check in on them once a year. Review your household’s investment accounts, employer retirement plans, life insurance policies, of course, your wills and trusts, and any other financial documents naming beneficiaries to make sure your current beneficiary designations protect and reflect you and your partner’s current intentions. I’ve heard and witnessed horror stories–not from my clients, of course, because we make sure this is looked after. But I’ve heard of people who were left out to dry because an old will, IRA, or insurance policy still listed an ex-spouse as the beneficiary.

[00:13:59] It is not self-seeking or it’s not a sin to ask your current partner, “Am I the beneficiary of your life insurance plan or is it your ex-wife?” It’s okay. You put your eyes on it. At least you want to have the information. And by the way, these wealth and self-protection strategies and best practices apply whether you’re single or married, maybe even more so when you’re not partnered, since there’s no pooling of the financial duties or dollars. No matter how big or small your household is, you still want to plan for realistic numbers as you accumulate wealth and spend it down in retirement.

[00:14:37] You want to ensure your estate plans and insurance coverage remain appropriate for you. Perhaps most importantly, you still want to take charge of your personal wealth by remaining informed and engaged in its ongoing management. Beyond your practical financial planning needs with the numbers and the spreadsheet and all the T’s you need to cross and the I’s you need to dot, there are other softer considerations when it comes to your individual personality and money mindset. Specifically, I do want to talk about your emotional needs and whether or not you’ve felt heard or listened to when you were in a meeting with a financial advisor.

[00:15:35] From our perspective as advisors, being aware of differences in people’s mindsets means we can be sensitive to what our clients truly need in life and need from us, and ultimately be of greater assistance. Unfortunately, I do know that that’s not how all advisors operate and it can lead to a real disconnect for the person sitting on the other side of the financial planning table. Remember the three financial practices I mentioned earlier in this episode, the ones that apply to everyone across the board? The first one is to establish personal goals and timelines and then craft a plan for achieving them.

[00:16:07] As financial advisors, we may be able to spout off all the facts and figures in the world and provide endless agenda items to discuss. But if those plans aren’t tailored to your needs and desires, that’s on us. It means we’re not doing our job because we haven’t listened to or engaged with you. And we need to consider our approach. And from your perspective, especially if you’re a woman, you may have encountered these sorts of conversations throughout your life where you’re hearing plenty but you haven’t felt heard back, or maybe you haven’t even been given the floor to speak. I can’t tell you how many women I’ve heard complain about this.

[00:17:19] And this really circles us back to the importance of self-empowerment and being a bold advocate for yourself. Has your spouse or advisor left you out of the loop? Does it seem as if they’re not really listening to you and failing to acknowledge you in the conversation. Or, even more nuanced, assigning you a secondary role in the conversations? To be blunt, and I think you know at this point you can count on me for that, if your advisor isn’t fully present for you, it’s probably time to seek out someone who is. Whether it’s with your financial advisor or your family or anyone else, it’s helpful to acknowledge that we all enter into conversations with baggage that affects the tenor of the talk.

[00:17:56] Bottom line, if anyone, including your own inner voice, is suggesting you don’t need to be engaged in protecting your own wealth, it’s really time to shift that conversation. If we can assist with that, I’d love to hear from you. At Hendershott Wealth Management, we give women and couples with wealth the right resources. We offer the financial support you need to align your money with your values and goals for the future, putting you in the driver’s seat.

[00:18:32] Remember those three things I mentioned I believe you’re best served by on your wealth-building journey? Well, my team and I’ve got you covered. We work upfront to help uncover your personal goals and timelines so we can strategize a financial plan that will realistically help you achieve those goals. We build and maintain your low-cost, globally diversified investment portfolio so you can experience the life-changing magic of compound returns. And we’re your partners in sticking to your plans and portfolio over the long term without making the mistakes that most self-directed investors do.

[00:19:06] We really, really strive to anticipate your needs, not just react when you have a question. And we’re here to offer the kind of financial support that prioritizes your passions and your savings; that protects your best interest and your assets. And we’re so proud of how we do all those things. In reality, almost anyone could start a financial advisory firm. For us, our purpose extends far beyond just dollars and cents. We’re here to help you reimagine what’s possible. No matter how money has gone for you in the past, you can have an abundance of it in your future. I’m living proof of that and you can be, too. We know what’s possible with the right mindset and support. And we want to see you thrive today and in the future.

[00:20:03] If that’s the kind of support you’re looking for, reach out to us at HendershottWealth.com/contact. That’s HendershottWealth.com/contact. We–I–would love to hear from you.