‘Money is Freedom’: Older women face barriers to investment; These rescuers thought

Cheryl Waters, 74, retired at age 70 with a healthy nest egg — no mean feat, since she had to start investing after a divorce and a few bad financial decisions left her retirement savings close to Zero when she had 50 years.
Rosem Morton for the Washington Post

Cheryl Waters, 74, was preparing for a trip to Puerto Rico to celebrate her wedding anniversary with her second husband when she took a step back to enjoy the moment.

“I never thought I’d be able to retire,” the former public teacher said. “If anyone had told me I would live like this, I wouldn’t have believed it.”

Maji retired at age 70 with a healthy nest egg – no point, since she had to start investing after a divorce and a few bad financial decisions left her retirement savings close to Zero by the time she was 50.

Her situation is similar to that of many elderly women. According to a recent study by Fidelity Investments, two-thirds of women in the Boomer generation started investing in their 50s or later.

This late start, along with a persistent gender wage gap during the workforce, causes women to have 30% less income in retirement than men, according to a 2020 Brookings Institution study. Women are also less likely to be employed in areas of work where the pension scheme is provided.

Maji began his retirement investments slowly, letting his employer’s retirement account take over and not paying attention. Then, after a conversation with an old colleague, he decided to take a more proactive stance and met with a financial planner recommended by a colleague.

Water started by asking him which stock he should sell to pay off his consumer debt. Instead of giving a specific answer, Maji said, the financial planner emphasized the big picture and the need to continue growing his income. His advice: “Maybe I should get a second job for a while.”

Cheryl Waters, 74, meets her French teacher, Stephanie Digby, via video chat. Thanks to his careful saving, Maji is planning a trip to Paris in a few months.
Rosem Morton for the Washington Post

Waters did just that, taking on extra internships for several years and applying for an interest-only mortgage, giving him extra money each month that he used to change his investment strategy. When she was 66½ years old, she filed for Social Security but continued to work, using the extra money to top up her retirement accounts and start a 529 education savings plan for her grandchildren.

His careful saving has paid off. He will follow his trip to Puerto Rico and a trip to Paris in a few months – and he will fulfill one of his most important goals: “I will be able to leave money to my grandchildren.”

Consider the gap

Nick Booth, an independent financial planner who has worked at one of the biggest firms on Wall Street, says he often encounters a “knowledge and confidence gap” between older and younger women who come to him for advice. Older people have been saving in a workplace account, but “as they get closer to retirement, they start to gain more weight,” he said.

Another problem Booth points out is that women are less likely to find wealth advisors because these professionals typically make a percentage off of all assets under management—where high-earning men dominate. For example, the Wall Street firm where Booth once worked would only pay his advisors for working with clients who had a minimum of $250,000 in assets – a threshold that later rose to $1 million.

Booth’s broad strategy with new clients is to start by asking what fundamental decisions led to where they are today. “I wish I had started sooner” is a common regret, he says.

One of Booth’s clients, 66-year-old Marianne Nishifue, had not planned on investing in the stock market as a self-employed adviser. But when he was in his 50s, his sister died in a car accident, leaving behind four adult children.

Nishifue knew she needed a big financial cushion to help take care of her grandson and grandchildren, so she followed a friend’s advice and started trading stock options. He found that his business background and penchant for in-depth company research complemented his intuitive knack for sensing whether a stock was worth buying.

By understanding the company’s owner, he said, he can sense the “passion and clarity and vision” he would like to see before investing in the company.

However, over time, his stock trading business changed—”I was trying to create my own index fund,” he demurred—so he turned to the personal advice site Finance Club and its affiliate tool Nectarine, an online database of fee-only financial advisors. There he found a hut.

Over time, Nishifue says, his investment style has evolved: he now takes a holistic view of his portfolio and keeps clear of emotional highs and closed doors to the performance of individual stocks.

No more ‘shame’

Lisa Croke, 50, also got a late investment after her marriage ended seven years ago. With $20,000 in consumer debt, $70,000 in student loans, no savings and little knowledge of the basics of retirement planning, he decided he needed to put together what he refers to as “his team.”

“I want to be a good example for my children,” he said.

The team included an accountant as well as a financial coach to help navigate questions in Croke’s first corporate job, such as explaining what “employer matching” meant and discussing options for advanced savings accounts—both terms she was unfamiliar with.

With their help, he paid off his credit card debt — a journey he later described on a podcast with his financial coach.

Then, once Croke started having extra money to invest, he opened a Trust investment account as well as an account with Acorns, a program that tracks a user’s daily activities and invests the difference directly. He describes the Acorns platform as a “carefree” way to get started with investing.

“I want to leave a legacy,” he said. “I will do it in the world, and do it, money is freedom, money is power.”

Croke also turned to social media for financial research, citing Tori Dunlap, known for handling @Herfirst100k, as an inspiration.

Croke says he has come a long way since he started his journey a few years ago and is glad he can “de-escalate” his investment strategy from the guilt he once felt about not understanding money.

“I can talk to someone about money,” he said. “I’m not ashamed anymore.”

#Money #Freedom #Older #women #face #barriers #investment #rescuers #thought

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top