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Take An Active Role in Financial Matters

Author: Helen Dennis, Specialist on Aging

Question: I am 81 years old and never managed money. My late husband, a retired surgeon who passed away 10 years ago, made all the financial decisions in our 52-year marriage. Fortunately, my health has been good this past decade. Now I need some help with driving and tasks at home. My oldest son manages my money and insists I cannot afford the services. His siblings disagree. I am not sure what to do. Any suggestions?

Answer: It is difficult to change longtime patterns and family roles.

When women typically did not work for pay outside the home, they often had discrete family responsibilities. Money was not one of them. The division of labor was clear. Men worked, earned the income, managed the money, and made decisions about large purchases, and women did all of the rest.

It is easy for women (and men) to continue a passive approach to money. However, in our later years we may pay a price for that passivity.

Note that there are reasons we may want to avoid dealing with finances. During childhood, family arguments may have centered on money. In adulthood, it may be the fear of being inept, such as not knowing about 401(k)s, balanced portfolios or reverse annuity mortgages.

Yet, when the use of financial resources influence, or even determine, our choices and quality of life, it’s time to pay attention.

I would strongly suggest that you become aware of your assets, money invested, money in the bank and money that is available to you. Also, your other children should be aware of your holdings so they may weigh in on decisions that affect you.

Your son very likely is considering your best interest. However, there is the remote possibility he is thinking about his own inheritance. That may be a long shot, but it could be influencing his views on spending. He also just might be a very cautious man with a low risk-tolerance when it comes to money. The other possibility is that your assets are limited.

Issues of age, money and economic security are substantial areas of research.

The Employee Benefits Research Institute conducts an annual retirement confidence survey that gauges the views and attitudes of working-age and retired Americans about retirement and related issues.

Here are some interesting gender differences and similarities from EBRI’s 2010 survey that have implications for the retirement years. About retirement confidence:

  • Men are more likely than women to say they are very confident about financial aspects of retirement.
  • More men than women feel very confident they are doing a good job in preparing financially for retirement.
  • Women are less apt than men to be very confident about having enough money for basic living expenses and long-term care.

About saving for retirement:

  • Men and women are equally likely to say they saved for retirement and continue to save.
  • They both equally contribute to workplace retirement savings plans.

About calculating money needed in retirement:

  • Both are just as likely to indicate they calculated how much they need to save to live comfortably in retirement.
  • Men more than women think they will need to accumulate $1 million or more. Women more often said they did not know.
  • Men also were found to be more confident investors, and sometimes overconfident.

In a study conducted by the Vanguard investment management company, of 2.7 million people who held IRAs in 2008 and 2009, men were more likely to sell investments at lows resulting in big losses. Women took less severe positions.

All of this is to say that you are not alone in facing some unknowns. Compared to men, women, in general, are not very confident in their financial planning for the future.

Here is a book that might be useful: In “Money Shy to Money Sure” (Walker, 2001) , co-author and psychotherapist Olivia Mellan discusses what women can do to better understand money. Mellan recognizes the psychological barriers.

Thank you for your candor. Best wishes for having the courage and confidence to ask a few bottom-line questions.

Copyright 2010 Helen Dennis. All rights reserved.

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