Facing the Haunted House of Money

September 25, 2015

Connect Member

Certified Financial Planner® & Wealth Advisor. Values based planning: the recipe for success


Halloween is a time when it’s actually fun to be scared. It comes in small doses and when you get really frightened, it’s easy to remind yourself that it’s not real. But brace yourself for the haunted house of money: a list of numbers that paint a ghoulish picture for women’s personal finances. They add up to a scary challenge for women preparing for retirement: $0.78, 11, 5, and 80 percent.

First is the gender disparity in pay. Women earn approximately 78 cents for every dollar that men earn. There are supposedly areas where the gap is closing, but for most women, it is a huge headwind to being able to save sufficient amounts. Over a lifetime of work, this amounts to a big difference in the money saved for retirement. When it comes to pay, it seems particularly important when receiving your very first job offer to ask the simple question, “Is it negotiable?”

Next, 11 years is the average time women spend out of the workforce to care for children or ailing elders. This is time off when women are not climbing the ladder, keeping skills current, and receiving pay increases. The result is fewer years to contribute to a 401(k) or other retirement savings vehicles.  

Five years is the amount of years that women tend to outlive men. Five years’ worth of money needed in retirement that men aren’t around to worry about. They are now ghosts in this haunted house.

Lastly, the sobering statistic that they didn’t tell you years ago: 80 percent (I’ve recently seen 90 percent) of women will be solely responsible for their financial well-being at some point in their lives. Yes, at some point you will be on your own. Count on it.

Any one of these numbers suggests a retirement planning challenge. Put them all together and it feels like the horror movie moment when the zombies are just outside the door and they are coming in.

It’s not like me to harp on the negative, but I keep coming across these numbers in my reading. From a planning perspective, it is imperative to take a more active role in your money life. It is scary to do that. But frankly, it can be scarier not to.

We all have our own personal fears around money.  Face them head-on, seek education, and acknowledge that it will require diligence to adequately prepare for being on one’s own.

Sometimes getting scared is fun and sometimes it can be motivating. Staring it down and taking action can be the best and most empowering experience of all.

Jeffrey Stoffer is a member of the DailyWorth Connect program. Read more about the program here.