I recently had the pleasure of chatting with some smart folks — including consumer expert Regina Lewis, small business expert Susan Solovic and Penn Financial Group founder Matt McCall — about women and money on Fox Business.
The topic at hand was the fact that female CEOs like Carly Fiorina of Hewlett-Packard Company (NYSE:HP) and Marissa Mayer of Yahoo! Inc. (NASDAQ:YHOO) actually average higher salaries than their male counterparts.
While that statistic is nice, I mentioned on the show that it actually misses the point. The majority of women aren’t CEOs of big-name companies and are indeed lagging their male counterparts in terms of pay (78 cents on the dollar, at last glance). As a result, we should instead be talking about issues like how women can take a more active role in negotiating salary on a middle-management level instead of worrying about a few outliers.
Along the same lines, women also need to take a more active role when it comes to investing. While these may seem like two separate ideas, they both play important roles in any female’s financial security. Women need to make the salaries they deserve … and then they need to make savvy investments with those earnings. Both boxes must be checked for women to achieve financial security in middle age and into retirement.
The Facts About Women and Money
Unfortunately, it doesn’t take much digging to find proof that women are indeed behind in the financial security realm. A sample of statistics about women and money, courtesy of Women & Money Magazine:
- According to an analysis of U.S. Census data by Wider Opportunities for Women, 42% of all women lack financial security
- That same analysis also showed that three out of five women over the age of 65 are unable to cover their basic needs, while 50% more elderly women live in poverty than elderly men.
- According to last year’s 14th Annual Transamerica Retirement Survey of Workers, a mere 7% of women are “very confident” that they will be able to fully retire with a comfortable lifestyle.
Obviously, a wide variety of factors play a role in this reality, including the usual suspects of women leaving the workforce to start families or getting paid less than male counterparts. But once again, women leaning in and standing tough when negotiating salaries is a step in the right direction to remedying this issue. And once that happens, women also need to lean in with regards to investing that hard-earned money.
My advice for women: Don’t leave your financial security in anyone else’s hands. For starters, if your employer offers a 401(k) plan, make sure you’re taking full advantage of those tax-deferred savings, including the employer match, if available. But beyond that, do your own research and digging. Stay abreast of market trends, stay on top of your portfolio, and stay on top of your financial future.
It’s the only way we’ll close the gaps that the majority of women still face.