The Realities and Risks of Women and Disabilities

When we think about risk, many of us think about skydiving, skiing accidents, or injuries from a dangerous work environment. And many of us imagine thrill seekers and men as the most at risk for disability. The scary reality is that the opposite is true.

Research I conducted as professor and director of the Center for Women and Financial Services at The American College found that women are more likely to face disability than are men. Yet only 20% of Americans know this. (1) And the majority of disabilities aren’t caused by risky undertakings or accidents that occur at work. Currently, the leading cause is arthritis (which women are twice as likely to get as are men), followed by back and spine problems. Together these conditions are responsible for more than one-third of all disabilities.

Even more alarming, the U.S. Social Security Administration estimates that one in four of today’s 20-year-olds will become disabled before they retire – a much higher probability than most realize. (2)

None of this is meant to scare you. Rather, I want it to empower you to understand the risks we may experience in life, and the importance of being prepared should something happen. Being unaware of risks means we unintentionally assume them.

What Would Happen Next?

Death and disability are two topics many of us would prefer to avoid talking about.  But just as we create wills and develop an estate plan, it’s important to consider what you would do if you experienced a disability.

Ask yourself this, how would you manage financially if you were impacted by a disability? What is your game plan? Should you be unable to work for three months or longer, how would you supplement your income? For most people, the answer is, they couldn’t. In The American College study I mentioned earlier, 62% of people are not confident their family would have enough money to maintain their current lifestyle, 42% worry they would not be able to afford the medical care they need, and 30% are unsure if they would have enough money to cover even basic expenses. (3)

Among women, there’s even greater concern. Women are almost twice as likely as men to think their cash reserves would last less than one month in the event of a disability. Single women are especially vulnerable, with more than one in four believing the consequences of disability would be totally devastating.

The Great American Protection Gap

For most people, their greatest asset is their ability to earn an income. To illustrate, say you earn $50,000 per year. Over a career of 40 years, you would potentially earn more than $2 million (without any adjustments for inflation or pay increases). If you couldn’t work for five years, you’d potentially lose $250,000.

Despite potentially devastating financial consequences of a disabling illness or injury, many people don’t consider disability income insurance or other strategies designed to help protect them. Less than half of Americans own disability income insurance (4), and other research shows that 61% of women have never done any research on disability coverage. (5) As a result, this lack of protection has become a significant gap in women’s financial plans.

Without an adequate disability game plan in place, many people are forced to rely on cash reserves to fund their disability expenses. While your health insurance may cover your medical expenses, it won’t cover your lost income. Do you have enough in your savings to fund at least three months of lost income? And even if you did, this could mean halting your savings for retirement, a child’s college education, or basic living expenses.

Those who are fortunate to have disability insurance through work often have a false sense of security about their coverage.  Most do not realize that group coverage generally includes only a percentage of base salary (usually 50 – 60%) and excludes income from bonuses or the value of employer-paid benefits (like health insurance, retirement plan matching or life insurance). The majority of group plans also have other important limitations to be aware of, like no provisions for inflation, broad definitions of disability and integration with Social Security. Last, it is essential to know if your company’s benefit will be subject to income taxes.  If the employer pays all or part of the premium, chances are the benefit is taxable.  These limits can potentially erode the value of benefits or likelihood of payment.

Potential Solutions

One thing women can do immediately is to learn more. The Council for Disability Awareness is a great resource (www.disabilitycanhappen.org). Education and knowledge are essential for feeling empowered and in control of your finances and important decisions. A trusted advisor can also shed light on disability income insurance policies, as well as if they are appropriate for your situation.

As a proponent of comprehensive, holistic financial planning, I always discuss risk management with my clients and how it integrates with all other elements of their financial plan. This includes also examining how to build a reserve fund, how to cover expenses in retirement, planning for tax reduction, investing, and estate transfers.

Remember, what you don’t know can hurt you. There are major knowledge gaps and misperceptions about the very real risks of disability. Starting the conversation with your advisor today can help you start planning for tomorrow. If you’d like to discuss how disability income may play a role in your financial plan, I encourage you to reach out to us by emailing info@moneyweave.com.

Next, it’s time to test your knowledge! Stay tuned for our quiz to see how much you know about women and the truths about their disability risks.

About Mary

Mary Quist-Newins, MBA, MSFS, Certified Financial Planner® is the President and Founder of Moneyweave LLC, a financial education company dedicated to helping women improve their financial well-being. With over three decades of experience, Mary is nationally recognized for groundbreaking efforts in financial services research, awareness generation and content-development. Beyond her past experience as a financial advisor, she is a sought-after instructor, speaker and passionate advocate for sound financial planning strategies. Mary also serves as Past-President and Treasurer of the National Association of Women Business Owners for the state of Minnesota (NAWBO-MN). To learn more, visit www.moneyweave.com or connect with her on LinkedIn. © Copyright 2019 Mary Quist-Newins.


(1) https://womenscenter.theamericancollege.edu/sites/womenscenter/files/Disability_Fact_Sheet.pdf

(2) https://www.ssa.gov/disabilityfacts/facts.html

(3) https://womenscenter.theamericancollege.edu/sites/womenscenter/files/Disability_Fact_Sheet.pdf

(4) http://www.insurancejournal.com/news/national/2011/06/08/201752.htm

(5) http://info.diservices.com/blog-disability-insurance/bid/345438/Surprising-Facts-About-Women-and-Disability-Insurance

My Experience as a Financial Advisor

Thirty years ago, I became a financial planner with then IDS/American Express (now Ameriprise). I was driven by two passions: helping others and pursuing a profession that is both challenging and humbling.

Growing up, I didn’t know what exactly I wanted to do in life, but I did know that I wanted to make a positive difference in the lives of others. After a gig in corporate marketing, I felt spent and empty. As a financial planner, I found I could weave together my financial knowledge to help others achieve goals, protect assets and attain greater peace of mind.

Starting My Career

When I started as a financial planner with IDS/American Express, it was my first foray into personal financial planning but I knew it was the right career for me. During my ten years there, I worked with more than 250 clients, leading the division in fee-based financial plans and serving as a director in corporate marketing. After American Express, I grew my experience as Region Vice President at ING Advisors Network and Senior Financial Consultant at Thrivent Financial.

In the first two decades of my career, I gained immense experience, working with a diverse range of people with various needs. Unlike many advisors, I had no interest in chasing markets or picking hot stocks for clients, in hopes of gaining large and quick returns. Rather, I saw firsthand the power of holistic, financial planning, taking into account the unique details of each person’s life, needs, and circumstances.

While building my career, I wanted to fulfill another passion of mine — educating women about finance. In 2008, I joined The American College as an Assistant Professor and founding Director of the Center for Women and Financial Services—the first and only academic center devoted exclusively to the study of women and money. Along with conducting research, consulting, and speaking, I wrote a textbook and published articles in various publications, including The Wall Street Journal, Financial Planning magazine, The Journal of Financial Planning, and more.

Founding Moneyweave®

After 23 years of diverse work experiences as an advisor, corporate leader, and academic, I founded  Moneyweave LLC as an independent financial planning practice with the goal of providing a comprehensive, objective approach to clients.

I sold my practice in January 2019. Moneyweave® is now an information, education and resource providing company dedicated to helping others — especially women — achieve greater confidence, clarity and control over money.

Working Together

If you are interested in having me speak to your organization or act as a guest contributor to your publication, please contact me at mqn@moneyweave.com

© Copyright 2017 Mary Quist-Newins.

Female Entrepreneurs and Retirement Planning

Many Unprepared

It’s been said that “failing to plan is planning to fail.” This is an eternal truth when it comes to money, and especially so for women business owners.  Why?  Because for most, their business generates more than half of their household’s income and a significant portion of total net worth.  Effectively planning and then allocating business income/capital are critical to the attainment of financial security.  Since women are prone to certain financial risks at higher rates than men (e.g., longevity, lower lifetime earnings, disability, caregiving), planning is even more important.

In general, the state of retirement preparedness among business owners is troubling.  According to a recent study of 400 business owners by BMO Harris Wealth Management, three in four participants had less than $100,000 saved in retirement funds. Fewer than one in 10 had accumulated more than $500,000, which would be considered insufficient for many.

Compounding the consequences of inadequate preparation is the possibility of early retirement due to unforeseen circumstances.A recent study from the Employee Benefit Research Institute found that almost half of Americans retire sooner than they planned. Of these, 56% cited health changes, disability and family caregiving as primary reasons. Just 24% stated they were able to afford earlier retirement and 10% said they wanted to do something else.  Lesson learned?  When planning for retirement (as with anything else), it’s important to consider both the upside and downside possibilities.

Retirement Planning Concerns and Actions

Perhaps in recognition of the gaps in preparedness, most business owners, male and female cite concern over retirement planning. However, there is a common disconnect between being concerned and taking necessary action to address those concerns.  I have witnessed this in clients as a vague sense of unease.  As an academic, I learned even more.

For part of my career, I had the privilege of holding the nation’s only endowed academic chair devoted to the study of women and money and founding the Center for Women and Financial Services at The American College. One of my most favorite projects was co-writing a quantitative research study about the financial goals, concerns and actions of women business owners in 2011.  Over 1200 business owners (835 women, 420 men) participated in the study and it was rich with insights. (See endnote for more information on methodology)

One of the most intriguing results was an apparent disconnect between concern and planning action as noted in the charts below.  (While these findings represent results for women business owners, responses for men in the study were directionally similar.)

The findings revealed that while the great majority (84%) of women business owners were concerned about retirement planning, fewer than one in four (22%) had a written retirement plan. We also learned that under one in 10 (9%) of women and one in 20 men business owners had a written plan business succession plan. This, despite more than half of all respondents saying they were concerned about maximizing the value of their business to help fund retirement – a significant indicator of the importance of succession planning.

What Keeps Business Owners from Planning for Retirement?

Many business owners view the common notion of retirement — a retreat from working life — as a foreign and sometimes even dreaded concept. After all, why “retire” in the conventional sense when you’re pursuing your vision for the business, family and personal life?

Many are also pre-occupied with meeting the needs of the “here and now” like cash flow and accumulation of reserves. Others plow everything back into the business, sometimes not even taking personal income let alone putting money aside for retirement.

Without good planning, retirement can just be an abstract concept. In the press of the business, it can be hard to separate oneself from the tangible “here and now” to plan for an intangible retirement concept.

While these competing demands are understandable, they are fundamentally dangerous if they get in the way of a well-thought-out and prudent plan. After all, most business owners take on far more risks than those employed by others. This means taking action to plan for retirement is critical and especially important for women due to higher risks mentioned above.

Five Tips for Action

  1. Reframe “Retirement”
    I encourage clients and students to think less about “retirement” in the conventional sense and think more about being “financially independent” since many view themselves working late in life. Financial independence means having the option, not the requirement to work. It is that point in time when you have sufficient assets to provide target income for the rest of your life, your spouse’s life and the legacy you wish to leave others.
  2. Visualize and Quantify Income
    Next, identify your desired lifestyle, interests and passions to explore.  Will you move, downsize, provide funds to children and/or charity or pursue other lifelong goals? How will life fundamentally change from what it is today?  Quantify these changes in your monthly expenses. Some use a simple income replacement formula for quantifying income needs using a 70 or 80% replacement ratio. (While I have serious concerns about the limitations of this approach as a Certified Financial Planner®, it’s a starting point at the very least.)
  3. Do the Math
    Thanks to really great calculators that are widely available for free online, running a simple retirement projection is quick and easy. Here is a link to a basic retirement savings calculator to get you started. https://www.moneyweave.com/resource-center/retirement/saving-for-retirementWhile online calculators are limited in their capabilities (for example, they don’t evaluate the impact of higher inflation on expense line items like health care), they can be an important step in the planning process. How? Because they increase awareness of what it might take in capital assets to fund retirement/independence. Even if you discover that funding gaps are deep and wide, increasing clarity gives you greater control and more purposeful action. It’s better to have this information early so you can adjust your thinking, plan and course of action, as necessary.
  4. Diversify Your Retirement Resources
    We all know the wise old saying about not putting all of our eggs in one basket. So it goes with diversifying resources for financial independence. Diverting income from the business to build up personal retirement/independence savings is essential to managing risk and accumulating resources, sometimes on a tax-favored basis.Putting in place a basic retirement plan (like Solo 401(k), SIMPLE 401(k), SEP IRA, SIMPLE IRA) is a generally recognized first step. Initially, you want to consider well-diversified funding mechanisms within those plans like low-cost target date mutual funds that give the benefits of strategic asset allocation, rebalancing to a target date (like financial independence when the funds are presumably redeemed) with relatively minimal expense.
  5. Consider Hiring a Financial Planner
    A range of resource studies indicate that this is an important step for many, especially when creating a comprehensive, written plan.  In addition, it has been my experience as a practitioner, academic and student, that retirement planning for business owners can be very complex. Even if you believe you are well on your way, the value of a second opinion cannot be overstated.All that said, be very careful in your choices here, especially when seeking out a “financial planner” since the use of that term is not currently regulated. I find the “10 Questions to Ask When Choosing a Financial Advisor” by the Certified Financial Planner® Board really gets at the important qualifications you should be looking for.  Here’s a link to that tool: http://www.letsmakeaplan.org/other-resources/selecting-an-advisor

iThe Financial Goals, Concerns and Actions of Women Business Owners, McCullough, Quist-Newins, Copyright© The American College, February 2012
iiAre Small Business Owners Too Busy to Think About Saving for Retirement? Brooks, The Washington Post, Copyright© October 31, 2016
iiiThe 2017 Retirement Confidence Survey, Greenwald, Copeland, VanDerhei, EBRI Education and Research Fund 2 Copyright© 2017, Employee Benefit Research Institute
ivThe Financial Goals, Concerns and Actions of Women Business Owner McCullough, Quist-Newins, Copyright© The American College, February 2012. Study methodology: Participants 835 women, 420 men, Criteria: more than 50% of business; make or share financial decision, continuous business operation for three or more years. Random sampling. Estimated margin of error +/- 3.3 percentage points for women; +/- 4.7 percentage points for men. https://womenscenter.theamericancollege.edu/research

Financial Literacy and You: Test Your Money Smarts

Financial literacy is a cornerstone of good financial decision making.

Over my career as a practicing financial planner, I loved working with clients to help them gain greater clarity and control over their money. It was a true joy to partner with hundreds of highly smart, accomplished, and talented individuals. However, I was often struck by the lack of basic financial literacy among even the most intelligent people.

As professor and researcher, I came across study after study confirming that most Americans – including the well-educated, affluent and financially successful — score poorly on financial questionnaires.

Lacking a good grasp on fundamental money concepts is a risk in its own right. Even more troublesome is that women tend to have lower scores than men, which further increases their financial risk.

I believe the heart of the problem is that financial knowledge has not been presented in ways that are easily understood or personally meaningful. We don’t teach financial basics in elementary, middle or high schools, as we should. Making things worse, we are besieged by often meaningless, overwhelming and sometimes downright damaging financial information.

As a result, I am passionate about helping the public better understand the financial issues that affect them, what their alternatives are and how to make smart money choices. With that in mind and for fun, take Money Smarts Quiz linked below. Test your money smarts, then review detailed answers to see how you measure up.

Ready? Here we go! Take quiz here.

The Paradox about Women and Money

Women have come a long way in the past century. Just a little over 100 years ago, American women were not able to vote, were not able to access financing for businesses or property. In many states, were prohibited from owning property, going to college and earning income. Now we see women build thriving businesses, lead cities, states, and nations, and raise powerful voices for equality. But there is a striking paradox about women and money: American women are more educated and affluent than ever, yet are also at increased risk of poverty when compared to men.

How can women build and protect their wealth, while understanding the opportunities, challenges, and implications this paradox brings?

The Opportunities

It seems that not a day goes by without the announcement of another major study on women-owned wealth and earning power. Representing more than half of the U.S. population, American women are better educated, paid more and live longer than ever before. As a result, they have become one of the world’s most powerful economic forces, not only in terms of what they spend but also in terms of their increasing wealth.

These trends are expected to continue as American females have earned more bachelor’s and master’s degrees than men for nearly three decades. Advances in education, combined with higher labor force participation, have led to increased earning and asset accumulation power.  These factors, along with generational and spousal wealth transfer, are leading some to estimate that by 2030, roughly two-thirds of the nation’s wealth will be in the hands of women.

The Challenges

While women today control about half the country’s privately held assets, nearly three in four Americans living in poverty are female. Why is there such a disparity? Compared to men, women face significantly more financial risks. These include lower lifetime earnings, greater longevity, higher probability of singlehood, increased likelihood of chronic and disabling health conditions, as well as lower financial literacy.

Women are also more likely to experience the “double jeopardy of long-term care.” That is, women represent both the overwhelming majority of those giving informal home care (about 75%), as well as those receiving facility care (approximately 70%). Both caregiving and care receiving can present devastating financial, emotional, and physical consequences without good advance planning. Each of these risk factors can represent a formidable challenge in their own right, but when combined with other risks, the sad result can be impoverishment. The U.S. Department of Labor gives us a glimpse of the alarming trend facing older females.

I call these risks the “big bummer sandwich!” Many financial advisors are unaware of these challenges, or if they are aware, fail to bring them up. It’s not fun to write, teach or talk with clients about them, but they are important to recognize, acknowledge and plan for. Without good planning  and far too often, women unintentionally assume financial risk. Risk mitigation begins with awareness.

The Future is Bright

When financial risks are adequately addressed, the economic future for women is bright and full of possibilities! A sound and well-thought-out plan helps women mitigate risk and set them up for success, not just in wealth, but in the big picture of life.

Good financial and risk management begins with awareness, education and tools.  Please visit our website resource center for informational articles, glossaries, presentations and calculators.

About Mary

Mary Quist-Newins, MBA, MSFS, Certified Financial Planner® is the President and Founder of Moneyweave LLC. With three decades of experience, she is nationally recognized for her groundbreaking work in financial services research, especially about women and money. Mary is a sought-after academic and spokesperson for financial planning strategies, the financial services industry, leadership best practices. She is past-president of the National Association of Women Business Owners in Minnesota (NAWBO MN), and has served as both the professor of Women’s Studies and founding director of the Center for Women and Financial Services at the American College. To learn more, visit www.moneyweave.com or connect with her on LinkedIn. © Copyright 2019, Mary Quist-Newins

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