woman financial planning

Study: As Marriage Rates Drop, Focus on Women’s Financial Planning

Sep 21st 2017
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Women will spend less than half of their adult years in a marriage and that will have a huge effect on financial planning, according to a new study by the Center for Retirement Research at Boston College.

What’s noteworthy about the research results is that finance articles have been written about the need for accountants and planners to include wives in financial discussions with married couples. But such advice often is based on planning for the household, which would include the husband and wife.

At one time that may have been the case but no longer. The recent study indicates that women are older when entering their first marriage, marriage rates are dropping, and divorce rates are rising.

“Thus, looking at women’s finances separately from men is increasingly necessary for a full assessment of their retirement security,” a summary of the study states.

The key takeaway for CPAs, tax planners and advisers? More needs to be done in understanding the savings and investment habits for women, separate from men. Accountants and tax professionals who are expanding their services to include financial advisory could heed this advice when planning for their women clients.

“If women as a group now spend about half of their adult years unmarried, it probably makes sense to explore their savings and investment behavior separately from men,” the report states.

The report notes that while women traditionally lived in households in which the couple makes joint financial decisions, focusing on that would draw a distinction only between married and unmarried women — not between men and women.

“But the times are changing, so the question is whether women are still spending most of their lives married,” the report states.

women's financial planning study
Image by Center for Retirement Research at Boston College

The report also indicated that the findings on spending and marriage reflected data across race and educational attainment. It revealed that the percentage of years married for white and black women alike dropped significantly. However, the study reported that black women have been married for fewer years than white women, and the decline in the percentage of years married is greater for black women than white women.

Black women also showed a larger increase in the number of years that they stay single, while white women had a notable increase in the number of years they are divorced. In fact, the percentage of all women who are baby boomers and still married dropped significantly from about 70 percent for older generations to roughly half for the boomers.

The numbers are about the same for women who had college educations or only high school.

The study doesn’t specifically address same-sex marriages or same-sex divorces.

The study was done by Alicia Munnell, director of the Center for Retirement Research at Boston College and the Peter F. Drucker Professor of Management Sciences at Boston College’s Carroll School of Management; Geoffrey Sanzenbacher, research economist at the center; and Sara Ellen King, research associate at the center.

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