Women and Wealth in the United States

Women and Wealth in the United States

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2016-04-29

 

 

HBO recently released a film called “Confirmation” which told the story of Anita Hill and the Clarence Thomas Supreme Court confirmation hearings. The event sparked a national debate on women’s rights and sexual harassment, with 1992 becoming known as “Year of The Woman.” 

Unfortunately, “Year of The Woman Who Has Equal Wealth” is yet to become a reality. 

Income has generally been used as the primary yardstick of people’s economic status. But wealth (or net worth) is a much more comprehensive measure of one’s financial situation.

A study by Sociologists for Women in Society shows that the gender wealth ratio reveals economic inequalities that are masked by gender income ratios.

In the United States, a substantial wealth gap exists between single women and single men. Couple households (married and co-habitating) have the highest median wealth, and single women have the lowest. The median wealth for single women between the ages of 18 and 64 is only 49% of the median wealth of their single male counterparts. 

Wealth inequality is not only more extreme than income inequality, but reveals disparities that are hidden when income is the indicator of economic status. For instance, never-married women, working full-time, closed the income gap in 2007, however, they owned only 8% of the wealth of never-married men. 

Married women have the largest income gap, but if one assumes married couples have equal ownership of marital assets, then they experience no wealth gap. It seems that at every income level, men have more wealth than women. And single women of color and women with children are more likely to have little or no wealth. Women of color face the compounding negative wealth effects of being both a woman and a person of color. 

Why Do Women Have Less Wealth than Men?

The gender income gap no doubt contributes to the wealth gap, but even if women and men had the same incomes, women would have less wealth. Single women are more likely than single men to have the financial burden of custodial parenthood. Women lack wealth-building fringe benefits (such as employer-sponsored retirement plans) because women are more likely to work part-time and such benefits are often denied to part-time workers. 

Even with similar credit profiles, women are 32% more likely to receive subprime mortgages than men, typically adding $85,000 to $186,000 more in interest over the life of the loan.

Consequences 

Women have less wealth to support themselves in retirement and to help them weather economic, familial, and medical crises. In addition, children of single mothers with assets have higher educational achievement, even when controlling for other important factors that predict children’s educational attainment.

Women’s financial dependency makes it more difficult for them to leave abusive relationships. And because women of color are less likely to marry and more likely to be single parents than white women, the racial wealth gap cannot close unless the gender wealth gap closes. 

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

Tags: David Lerner Associates, Women and Finances, Gender gap,

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Jake Mendlinger
Account Manager
Zimmerman/Edelson
516.829.8374 X 232
jmendlinger@zimmed.com

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