Are women really at a financial disadvantage? Research from the Journal of Women and Aging suggests that, "women are at a financial disadvantage because of fewer years in the workforce, more disruptive life events [such as childrearing] in their work history, and because the likelihood of jobs with lower pay".

When reading the statement above, your first thought on childrearing could be that it's a "disruptive life event." However, this research focuses more on the aspect of familial caregiving specifically with 80% of home health care of older adults being provided by adult children and 75% of which are female.

But what does all this have to do with you?

The study hypothesizes that each informal caregiver loses an average of $25,494 in Social Security benefits, an average of $62,202 in pension benefits, and an average of $566,433 in wage wealth over their lifetime. Combined, this is an average net loss of $659,139. While this has been reported to affect women the most, this is not simply a female issue. This is a family issue that needs to be addressed far before the thought of caregiving is even on the table.

Retirement planning for you doesn't simply involve yourself; rather, it will affect your entire family. According to an article by Forbes, Changing Family Caregiver Dynamics Ramps up the Importance of Long-term Care Planning, many people don't think that they will need long term care services; however, up to 70% of the population will at some point in their lives. The best time to plan is in your 50s and 60s, and should be included as a part of your overall retirement savings, even if you think you won't need it.

Here's one thing we know for certain. Change is constant; and, no matter how much you plan, there are always unpredictable events. You can hedge against unpredictability with preparedness. Talk with your family and talk with your advisor. Planning is not just about your peace of mind; rather, the difference in the financial health of your family.

Source: Orel, N.; Ford, R.; Brocks, C.; Journal and Women & Aging, Vol. 16(3/4) 2004. Hawthorn Press.

Caroline Hill, Financial Advisor


(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).