Women are not only paid cents on the dollar compared to what men earn, but, due to extenuating circumstances (e.g., the birth of a child, child-rearing, divorce, tending to the needs of an aging parent, etc.), Edward Jones and Age Wave have found through their research that, on average, a woman can earn $1.1 million less than her male counterpart over the course of her career.

Retirement plan and wealth advisers say they are aware of the hurdle women are facing, and there are ways they try to help their clients overcome it.

Sharon Olson, president, Olson Wealth Group, counsels women on job choices and negotiations, which she says isn’t something most women would think about, but that comes more naturally to many men. This is why Olson helps women with such decisions.

“Evaluate job offers prior to accepting,” Olson says. “Review benefits closely and ensure they are accounting for all life events such as disability, maternity leave, etc. If you are married and your spouse is employed, determine if your spouse’s company benefits can meet the coverage you need. Determine if there is a lack in coverage for your family. Negotiate with the organization you work for to ensure you are receiving appropriate coverage. Implement outside insurance to make up for any differences, and set up a financial plan for unexpected job interruptions with your adviser.”

Olson further suggests that women curtail any discretionary purchases to keep in line with the assumptions above.

“We are aware” of the gender pay gap, says Danielle Voloshin, a wealth adviser at Miracle Mile. “Managing finances looks different for women than it does for men.” 

She says her experiences in the adviser industry support the research from Age Wave and Edward Jones that finds, over a 40-year career, the impact of lost wages could be as much as $1 million in earnings potential difference. “It significantly undermines financial independence,” she says.

Career Strategy

When they’re looking for new jobs, women in executive positions can think about hiring an executive compensation attorney or negotiation specialist to help determine if they are appropriate for the position and/or have these advisers contact the organization directly, Olson says.

It doesn’t hurt to be wary of accepting a position if it might not turn out to be the right fit, she says. “Seek to learn more about company culture and expectations prior to signing offers,” Olson suggests. “Speak with other women within the organization. Review company materials and leadership structure.”

Olson says, in her experience, men are more comfortable negotiating terms of a deal, such as requesting that the company pay short-term disability after tax. “This will ensure if you need to use it, the benefits will be tax-free,” Olson explains.

Beyond that, Olson says, she encourages women to learn about all the various benefits their company offers—such as 401(k) match programs, stock options, vesting schedules, student loan debt repayment options and/or restructuring, 529 college savings plans, or continuing education—and maximize them.

“Traditional vesting tables were often created when work demographics were different, and employees remained with one employer for decades, or for that matter, even entire careers,” she says. “Today, those same employers are hiring women who may move in and out of the workforce more readily due to family obligations. A female employee will lose out on a significant financial advantage during peak earning years when leaving unvested benefits on the table. Without updated vesting options, women may experience financial setbacks too difficult to overcompensate in the future. A financial adviser can assist in reviewing these details with a potential employer.

“Decisions on maximizing Social Security income are even more important for women, who may have fewer working years but a longer life expectancy than their male counterparts,” Olson continues. “A financial adviser can model multiple scenarios to maximize the ultimate decision about when to begin receiving Social Security benefits.”

Caring for Elders

Caregiving is certainly a big concern for women throughout their lives, not just during childbearing years, Olson says. “Sandwiched” Baby Boomers and Generation Xers, for instance, might still be paying for their children’s college or taking care of some of their bills to help them get them on their feet, all while helping a parent whose health is in decline. This can be costly not only from an earnings perspective, but from a mental health perspective as well.

But there are government-sponsored remedial programs women can turn to for help. “Many states allow individuals to receive financial compensation via Medicaid to provide care for a loved one,” Olson says. Financial planners can ensure the women they advise follow Medicaid eligibility requirements prior to starting payment.

“Determine if long-term care coverage is appropriate for your caregiving situation,” she continues. “Some policies allow for paying family or friend caregivers through the policy benefits.”

Then there is the option of a female caregiver getting paid directly by a family member or friend. Draw up a personal care agreement (i.e., a contract between the caregiver and care recipient), Olson suggests. “Consult an elder care lawyer,” she says. “Keep professional records (services performed, dates of work and amount paid).”

It is also smart for women to find out if their company offers paid leave for caregivers. 

The bottom line, Olson says, “Women statistically live longer, make less money, are still the primary caregivers and tend to save less for retirement. It seems there is a long way to go. As a female adviser, I’m taking a proactive role in supporting women to narrow this gap and helping them navigate how to be more equipped and empowered to be financially wise.”