As the wealthiest generation, baby boomers hold an average $1.2 million in household net worth as of 2019, accounting for almost 50% of all wealth in Canada, according to the most recent statistics available for this age group (1).
But who’s overseeing the money and the way a family’s assets are allocated?
“Baby boomer women need to take an active role in managing their household finances,” women’s wealth and financial empowerment expert, and author of the recently-released book FLY!: A Woman’s Guide to Financial Freedom and Building a Life You Love, Steph L. Wagner told Money.ca.
Statistics show that this cohort is more likely to outlive their husbands by several years. With the burden of not only managing daily budgeting but also deciding on how their estate will be distributed after their own death, women in this age group should be empowered to understand their investments and options for their wealth.
This is especially important since it is expected that by 2028, women will control nearly $4 trillion in assets, a significant increase from the $2.2 trillion they currently control (2).
Here’s what you need to know now to empower your future decision making.
Those born between 1946 and 1965 are largely in retirement or are fast approaching their golden years (3). In Canada, the average life expectancy is 81.7 years — but that works out to 79.5 years for men, and 83.9 years for women (4).
That means an average of approximately four years of solo money management for women, at a time when they may be experiencing poor health and cognitive decline. That’s why it’s imperative that boomer women are involved in financial decision making today to ensure they feel confident about money in their 80s.
And what about single women? There are approximately 2.9 million boomer women who never married, were widowed or divorced in Canada (5) — they also need to feel empowered about managing their retirement funds, creating a will or trust and making practical decisions about the care they can afford in their later years.
“Experts in longevity predict that there will be a 400% increase in the number of people who will live to 100,” says Wagner.
“Nearly 70% of those people will be women. When you consider the rise of grey divorce and the fact that the average age of widowhood in the U.S. is just 59, it’s predicted that eight out of 10 women will be navigating aging alone. And most are not prepared for the financial fallout.”
Read more: Here are 5 expenses that Canadians (almost) always overpay for — and very quickly regret. How many are hurting you?
The data shows that — good news — a majority of women are involved in household financial decisions, with 68.7% of women report feeling in control of their finances (6).
However, women’s financial education and confidence in their knowledge is still lagging behind men. A recent Ipsos poll found that 76% felt confident about their financial decision-making capabilities, compared to 83% of men (7). When it comes to assets, 64% of women aged 55 and older felt they had a strong investing capabilities, compared to 69% of men.
If you’re also feeling less than confident about your finances as you reach your senior years, you still have time to catch up on your financial education and feel prepared for managing wealth on your own.
Wagner offers some pointers for baby boomer women to help them gain confidence.
1. Create a dynamic financial plan
Wagner warns that too many people are reactive in their financial planning, jumping from one financial emergency to the next. Your financial plan needs to be flexible and adaptable, especially in retirement as you may face changes in your health and circumstances.
2. Break the money taboos
If you haven’t got a clear picture of your finances as a couple, it’s time to start talking. You should understand how much income you have each month, how it’s used, your assets and your debts. Wagner recommends an emergency fund of six to nine months of expenses for women in this age group.
3. Educate yourself
Take the time to really understand how money works, and how to maximize its growth potential. Many women hold too much cash, Wagner says, and women in Canada retire with 30% less money saved on average compared to men (8).
4. Plan for a longer, more expensive life
The pressure to make your money last is getting higher with inflation and the rising cost of housing in Canada. As people are living longer, your retirement fund may have to last 30 years — are you prepared?
5. Find the right mindset
The first step toward financial empowerment is to navigate change successfully. Wagner says, “From my own life’s journey, I’ve learned that many women (like I once did) carry an ‘It will never happen to me’ attitude. But life can change in a moment. Financial independence isn’t just about having enough money to never work again. It’s about owning your worth and understanding that no one — spouse, parent, sibling, or friend — can grow and protect your wealth better than you.”
Having a wealth of financial literacy and being able to apply that in day-to-day money decisions is paramount, especially for boomer women. As this generation is expected to control an increasingly high concentration of wealth in the next few years, it is important to make them feel empowered to manage budgets, oversee portfolios and allocate their assets once they pass away.
A can-do mindset built on independence and resilience will help women stay clear-eyed and focused, and able to weather any of life’s curveballs that can derail one’s golden years.
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Statistics Canada (1, 3, 4, 5); Cision (2); Women of Influence (6); Ipsos (7); Sun Life (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
