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It has been a well-known fact that women’s healthcare costs are much higher than their men’s healthcare costs. According to the National Women’s Law Center, women spend one billion dollars more each year on healthcare costs than men do during the same year. Previously, numerous health insurance companies were charging women a higher premium for private insurance coverage. However, the Affordable Care Act (ACA) eliminated this gender-bias practice and forced insurance company to no longer base premiums on gender. But will the new act really have an impact on the out-of-pocket expense that the average woman will have to pay for healthcare?

Why Are Women’s Cost Higher?

These figures for women’s healthcare cost are difficult to refute, but what makes women’s costs so much higher than men? The first thing to consider is that the majority of women have one or more baby during their lifetime and maternity costs are rising every year. In addition, statistics show that women live an average of five years longer than men. This adds up to five more years of healthcare costs, which can be particularly high for the elderly. Women also typically obtain costly preventative care check-ups at a faster rate than men, and will pay a high price for contraceptives during their lifetime. When factoring in the high rate of insurance premiums, the increase in deductible and co-pays, and the number of medical services that are not covered under insurance, it is easy to see that many women are paying an astronomical amount for healthcare costs.

Problem of Un- or Underinsured

Nearly 20 percent of the women in the country currently do not have insurance. The majority of these women go without the medical services they need because they cannot afford the healthcare costs. Even those women on insurance have a hard time paying their portion of the bill. According to a study done by the Kaiser Foundation, one in three women, who have some form of insurance, do not get the medical attention they need due to high healthcare costs. More than 100,000 women every year lose their health insurance coverage due to a divorce. While COBRA will also help these women maintain the same coverage for up to three years, it usually comes with a very high premium. The ACA may help slightly with this problem, but it is likely to still leave a huge gap in the healthcare industry for women.

Costs during Retirement

Even more importantly, there’s also healthcare costs after retirement. While women may qualify for Medicare after retirement, it will typically only pay 60 percent of the healthcare costs. A study done by Employee Benefits Research Institutes reported that a 65 year old woman might pay as much as $200,000 in out-of-pocket healthcare expenses during her retirement. Plan for these additional costs by doing things such as obtaining long-term care insurance well before retirement age.

In online articles and discussions there’s no shortage of data related to the Female Financial Paradox that states that although women are earning more income, they still tend to have old-school concepts of money that dictate budgeting and penny pinching rather than using money to grow money.

One notable survey asked 10,000 women about their financial lives. The data returned showed that 90% of women say they are the family breadwinners, yet only 76% are the chief financial planner for the family. In fact, 60% feel they have below average understanding about investing and financial planning skills, and due to discomfort less than 50% seek financial advice.

Statistics don’t have to define your life.

Even though the female financial paradox is very real in the lives of most American women, it does not have to be that way. Currently, there is a surge of women who are earning higher degrees. Women lead in degrees earned: 62% earned AAS, 58% earned a Bachelors, 60% have earned a Masters, and 52% earned a Doctorate.

There is no lack of education among women, so why are they struggling with finance? For the most part, even though they are earning higher incomes, they are still earning less than their male peers at a rate of 81% less or .66 per dollar earned. This unfair imbalance in wages makes it more challenging for women to move away from day to day budgeting and move toward longer term financial planning.

Take small steps to avoid being a part of the statistic.

Naturally, the first step is realizing that financial planning is a good thing rather than a necessary evil. Many women who feel they need to tightly manage their income are unwilling to pay to learn how to manage money because they may not be able to see the potential for a return on the cost of learning.

Planning your future is work that is well worth the effort.

It is not as hard to learn about savings and financial planning to make money grow as it would seem. Yes, there is a lot of foreign sounding terminology and the math may be challenging at first, but over a relatively short time you can learn how to manage your money to grow and be there for you when you are ready to make a large purchase, such as a home or car, and it will be there for you when you are ready to enjoy your sunset years.

In the news lately there has been a term bandied about that peaks reader’s interest, but they still don’t quite understand what it means. That term is Female Financial Paradox. The basic idea is that women tend to manage money by saving and budgeting rather than planning and investing to improve their financial lives.

What is the crux of the Female Financial Paradox?

The concept of increasing the value of money by developing financial plans is difficult for many women to implement into their lives because they’ve been socially trained to pinch pennies to stretch the dollar, while it was their husbands’ job to plan how to save for a rainy day or invest in order to make large purchases, such as a new home, or set aside savings for the children’s educations, or improve their retirement years.

Indeed, women now in their 40s were raised to believe that it was the mother’s job to tend to the day-today money management, while it was their father’s job to manage larger financial matters. As a result, these women were not likely to have been encouraged to learn about saving and investing by either parent. Even women in their 30s were raised to believe that their earnings were supplemental income to their spouse’s earnings, while the husbands remained the key breadwinners and financial manager of the household.

It worked in the past. Why is it an issue now?

That may be what is going through your mind, “If it worked over the years, why is this a paradoxical issue now?” The Female Financial Paradox matters because more and more women are earning more than their spouses – from earning more college degrees to societal changes that recognize women as good workers and capable of performing well in leadership positions.

Recently, DailyWorth, the leading digital media company for ambitious professional women, did a survey asking questions to 10,000 women about their roles in family financial planning. The information learned from the survey shows the conditions related to this paradox quite clearly:

• 90% of women identified themselves as the main breadwinner in their households.
• Only 76% consider themselves the primary retirement planner.
• 60% admitted that they have below average investing and planning skills.
• Less than 50% of the women surveyed sought financial resources to learn about financial planning.

Women are earning better income and gaining more status in the business world, yet they still have a short-term, immediate view about money and would rather have someone else manage long-term matters for them.

In order to change the Female Financial Paradox, women must create a paradigm shift regarding their perception of money and how to use it. Rather than focusing on the size of their paychecks and how they can stretch it for today, they need to educate themselves about how to use their earnings for longer-term gains that make that better income worthwhile.

While Thanksgiving is a time to enjoy the company of loved ones, it’s also a time to give thanks. We’d like to extend our sincere gratitude to our PLJ community who has been a part of us throughout the year.

“Gratitude helps you to grow and expand; gratitude brings joy and laughter into your life and into the lives of all those around you.” –Eileen Caddy 

As 2013 comes to a close, we wish you a happy and peaceful Thanksgiving.

As you’ve probably heard by now, our government has officially shut down. After weeks of failed negotiations and threats from both sides of the aisle, the deadline for coming to agreement on funding various government agencies has passed. With today being the first day of the shutdown, and seemingly little progress toward Congress passing a funding bill, you likely have many questions about how all of this could affect you.

First of all, if you are one of the 533 members of Congress, don’t worry, everything will be OK. You will still get paid regularly throughout this whole ordeal and your congressional paycheck will not be interrupted, even though you couldn’t do your job and affected hundreds of millions of people. As the old saying goes, “if at first you don’t succeed in passing a funding bill, make a half-hearted attempt to try again, point your finger at the other side, and then shut down the government.” Now, if you’re not one of the lucky 533, then here are some points to keep in mind…

To start, it’s important to realize that a shutdown isn’t exactly what it sounds. If I was to compare it to a computer, instead of being completely turned off, the government has entered screensaver mode: it’s still on, just not really doing all that much. Some government agencies like Department of Housing and Urban Development, Environmental Protection Agency, and NASA, for example, will have to furlough most of their employees while keeping just a small percentage on board, who are absolutely indispensable. Other agencies will have to scale back some of their work, but will still continue to provide the most essential services to the public. For example, the Social Security Administration will still work to make sure that benefit checks are sent out, but won’t be able to help with less urgent services, like replacing Social Security and Medicare cards, or issuing proof of income letters. The Department of Health and Human Services will have to operate on only about half of its workforce. Just imagine if the company you work for had to furlough half its staff – what quality of service would the customers receive?

On the other hand, the Postal Service will still remain open because it has a completely independent source of funding and will not be affected by the shutdown. This is something to keep in mind in case you’d like to stroll over to your local post office branch, slap a stamp on an envelope, and send an angry letter to your congressman (or congresswoman) to get their act together!

Whatever your point of view (and whoever you think is to blame) the bottom line is that this stalemate within the walls of the Capitol will have significant impact on the country, especially if it lasts more than a few days. Depending on how long this lasts, the impact on the economy to be in the hundreds of millions of dollars. But more importantly, this raises a question of what will seniors, and those nearing retirement, do if the shutdown becomes a prolonged debacle? Sure, Social Security checks may keep coming for now, but what if you lose your benefits card? What if you need to schedule a disability hearing? What will happen to the services offered by the State, that depend on federal funding to operate?

To me personally, this is proof, once again, that when it comes to the well-being and security of you and your family, you cannot depend on anyone but yourself. Our legislators have shown over and over that they can’t agree with each other or learn how to compromise. They’ve taken the country to the brink more than once in the last several years, and you have to ask yourself: “Are these the people I would like to trust with keeping me safe in my retirement? Will they really do everything they can to make sure that I and my family are taken care of and that I will receive the benefits I was promised, and for which I paid taxes?” If your answer is “yes,” then no reason to worry. Keep your head firmly buried in the sand, and keep your fingers tightly crossed. Remember, if you don’t see it, then it doesn’t exist, and you have nothing to worry about.

But if you’d like to be the one in control of your future, if you’d like to know that you can keep yourself and your family financially secure during difficult times, start taking steps today to build a better future for yourself, so that you’re not so dependent on the whims of Washington. Start budgeting better and setting aside more money for retirement. Contribute more to your 401(k) and build an emergency fund in a savings account. Review your retirement portfolio regularly to make sure you’re not exposing yourself to too much risk for your age. Every little step will help you build a more secure retirement, and will help you take better care of your family in an emergency.

Now what are the possible implications of the government shutdown on your retirement savings? Attend my workshop. Don’t rely on the government! Click here to register.