Experts Share How Women Stand To Benefit


insta_photos / Getty Images/iStockphoto

insta_photos / Getty Images/iStockphoto

As women are projected to control a third of total U.S. household financial assets — more than $10 trillion — over the next decade, significant sums of money are expected to change hands, largely due to shifting demographics.

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A McKinsey report found that 70% of affluent-household investable assets are held by baby boomers, and as men pass, many will cede control of these assets to their female spouses, who tend to be both younger and longer lived.

“By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess — a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States,” the report detailed.

Women Becoming More Financially Aware

Another demographic shift is that younger affluent women are also getting more financially savvy.

“It’s an unprecedented time in history that is giving women an opportunity to put themselves in a financially secure position,” Stacy Francis, a certified financial planner and president and CEO of Francis Financial in New York, told CNBC.

Yet, along with these shifts and this transfer of wealth, there is still an enormous financial gender gap.

For instance, a recent Varo Bank survey found that women are significantly more likely than men to be living paycheck-to-paycheck, with 59% of female respondents saying as much compared to 41% of men. In addition, 67% of women said they consider themselves financially fragile, according to the survey.

This new wealth transfer might give women new opportunities, “but it’s not a no-brainer,” Francis told CNBC. She added that women need to have the tools to retain financial stability.

Also: 7 Things the Middle Class Spends Money on That Hurts Their Chances of Being Rich

Changes Coming to the Finance Industry

One consequence of the “Great Wealth Transfer” is that the financial advisory industry will have to change and adapt to meet women’s needs.

Carla Adams, founder and financial advisor at Ametrine Wealth, argued that said transfer is going to be a huge benefit for all women, not just the ones who are inheriting the wealth.

“Data shows that when their spouse dies, most women fire their financial advisor and find a new one,” she said. “The financial advisory industry as a whole, in my opinion, unfortunately does not currently serve women well.”

In addition, some experts suggest that the upcoming transfer of wealth needs to be tempered by an understanding of wealth disparities and healthcare costs.

Jay Zigmont — PhD, MBA, CFP and founder of Childfree Wealth — argued that while there may be trillions of dollars in wealth that would pass after death, for the vast majority of people, their wealth is going to be absorbed by healthcare costs, particularly paying for long-term care.

“As with much of the U.S., it is a story of net worth disparities. Those whose families are millionaires may be getting money from their estate, while others will get nothing,” he said. “Good financial planning can help to control long-term costs and prevent the entire estate from going to healthcare.

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This article originally appeared on The Great Wealth Transfer: Experts Share How Women Stand To Benefit


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