Women can earn $1 million less than men by retirement age when combining the lifelong pay gap with common workforce interruptions. With that in mind, Merrill Lynch Wealth Management’s Orange County Inland Empire market executive Lanän Clark spoke to KVCR about women and the wealth gap.
The average woman spends about 44 percent of her life out of the workforce.
Clark: “And it could be for different reasons - caring for her children, her parents or sometimes even a spouse. And in that case, it is very possible for a woman to have earned over a million dollars less than a man over the lifetime of a career versus a man who stayed continuously in the workforce during that time.”
That’s Lanän Clark. She says women can get on more equal footing with men in a few key ways.
Clark: “I think the first thing is to understand the position of power from a wealth standpoint for women in the United States. As of this year, by the end of this year, women in the United States will control some 22 trillion - trillion with a t - 22 trillion of wealth in the United States by the end of this year. But then when you talk to women, and we did this great study at the firm, 61 percent of women would rather talk about death than money. So when we start talking about what are some things that we can do in the new year, one of them is to simply break this taboo around the money talk. We need to be able to have the conversations, we need to be able to ask the questions. And start engaging in those conversations between friends and family and other financial professionals in the press and in schools. I want to see our women seek mentors and learn more about money and finances, so that they have some comfort level in their own financial world, but then be able to pass that knowledge on.”
A second thing women can do is turn longevity into an asset.
Clark: “We gotta start saving early, so the journey, the life's journey for a woman of course from a longevity standpoint is longer than that of a man's, but if you consider what we talked about around the wealth gap, what happens is our women are living longer but their lives are not funded accordingly. So we've got to turn that longevity into an asset and we do that in this new year by starting to save early, taking advantage of tax-efficient savings options, we need to consider working longer and then maximize our social security and pension benefits by staying in the workforce a bit longer.
According to Clark, women should plan their finances early and often.
Clark: “Go ahead and consult a professional to discuss their life priorities and goals. And we know the priorities for women differ pretty substantially than they do for our male counterparts, so have those conversations, plan early, create a plan that's going to match their unique circumstances and then stick to it.”
Clark says she’s excited to see more women business owners and investors.
Clark: “What I'm excited about is we've decided that we really do want to step up on the money front, we see more women business owners than anything we've ever seen, it's explosive. But in 2020 I'm really looking forward to our women coming at the helm - look, we're making the money, we're controlling the money, but we're not investing the money. And so it's up to us to really be on the forefront of being able to close, once and for all, that wealth gap.”