Financial Planner’s Message: Get Started Early
Jane Hensler often looks into the faces of the students in her class on Financial Awareness and Divorce and thinks, “I’ve got to reach these people earlier.”
“So many people are really surprised when they get handed the (responsibility for their) finances in later life, especially the women,” said Hensler, who teaches the adult education class at Irvine Valley and Orange Coast community colleges. “The women tend to sit in my class and look blown-away.”
A financial planner by profession, Hensler is preparing a class for those working toward a community college degree--generally young men and women who are 19 or 20. The hard part, she figures, will be getting young people to sign up for it. “I’ll have to call it something like ‘MONEY!’ ” she said.
Her message is that people have to start financial planning early, and that goes double for young women.
Here’s why.
In a new book, “Women & Money,” Frances Leonard says pension and Social Security laws discriminate against women. A former legal counsel for the Older Women’s League in Washington, Leonard cites these findings:
* Three out of four poor people over the age of 65 are women.
* Women retire with about two-thirds the income of men and live one-third longer. So their fixed incomes are eroded by inflation over more years.
* Only half as many women get pensions as men. Women workers are clustered in the service sector and in small businesses, which are least likely to offer pensions.
* To qualify for a pension--to become vested--a worker must stay a minimum number of years on the job. Women leave jobs more often to raise children or to care for an ailing parent.
* No Social Security credits are earned by women for their home-making years.
* If a marriage lasts 10 years or longer, a widow is entitled to 100% of her deceased spouse’s benefit, whereas an ex-wife is entitled to only 50%.
“One-half of a Social Security benefit is simply not enough to support anyone,” Leonard writes, “and in this era of easy divorce, countless women are put into a situation they didn’t ask for, and impoverished thereby.”
Shearson Lehman Bros., the investment arm of American Express, has identified mature women as one of its growth markets. Brokers have been told to get to know the female half of the couples they serve, said Shelley Freeman, national financial planning director.
“Our first step has been to say, ‘Don’t ignore the female partner,’ ” Freeman said. “One day she will be in control of the assets, and if you don’t have a good relationship with the woman, she’s going to go somewhere else.”
The company is exploring a way to reach women more directly, Freeman said, and may test some ideas in Orange County during an October seminar. “Southern California is a particularly well-populated pocket for the women we’re looking for,” Freeman said, “especially in the Newport Beach area.”
However, financial planning is not just for the wealthy who can afford to pay between $100 and $200 for advice from a private counselor.
For those with less to spend, the UCI Women’s Center is preparing a series of two-week classes and lectures beginning in January, with costs ranging from $5 to about $50.
University instructors and professional planners will talk about managing crises like divorce and widowhood, as well as planning ahead.
City community services centers and senior centers generally offer free counseling, advising people about Social Security, disability or supplemental income benefits they might not be aware of.
Kay Byrum-Ellerman, a familiar face on the lecture circuit in Orange County, has built a business on marketing financial services to women.
She and her partner, Ronald Moceri, launched Financial Services Unlimited Inc., based in Laguna Hills, in 1981 by offering a free seminar. About 100 women showed up. After such a good turnout, they decided that marketing to women should be a permanent part of their business.
They set up a women’s division, geared to reaching women who might have been intimidated by financial planning in the past.
Byrum-Ellerman had first tried to start a retirement planning service for women in 1978, and she found to her surprise that women weren’t ready for her advice.
Many of her clients, like Byrum-Ellerman, had just divorced. Still, they put her off, saying that they would have to check with fathers or boyfriends before making a decision.
“I couldn’t believe it,” Byrum-Ellerman said during a recent interview. “I asked one woman whether she expected her boyfriend to be around for her retirement.”
Today, most of her female clients are married, but they are either planning ahead for an impending divorce or are in charge of planning the family’s finances.
“I find that the women are the seekers of information today,” Byrum-Ellerman said. “I work with a lot of couples, but they find me through the women.”
Linda White, who took over as director of the UCI Women’s Center in May, said she is hoping to encourage that independence in women.
“We’re trying to reach women in their 20s or 30s, to have them understand how they might prepare for retirement, how to buy a home, how to have savings,” White said. “Really, it’s about not having to depend on someone else.”
What Every Woman Should Know About Pensions
* If you are the wife, former wife or widow of a worker or retiree who is covered by a pension, you have the legal right to check your status with the pension plan administrator.
* If you were at a former job long enough to qualify for a pension, you may still be entitled to it. Plan administrators must respond to your written inquiry.
* If you are eligible for a pension but have not worked enough hours to be a participant and you need to take a leave of absence, ask if you can work at least 501 hours per year (about three months), rather than leaving entirely. The arrangement can save you the loss of pension credits you would earn if working full time.
* If your job doesn’t include a pension, don’t despair. You can begin a savings plan that will help make up the difference, even if you are in your 50s, to supplement Social Security payments.
Source: “Women & Money” by Frances Leonard
