Beyond Shrink It and Pink It: The Unique Needs of Women in Financial
Planning

Marketing execs have often tried to slant products toward women using an outdated strategy known as “Shrink It and Pink It”. This strategy involves taking a known product and making it smaller and coating it in pink or other pastel colors believed to be more appealing to a female market.

The athletic wear industry used to engage in the “Shrink It and Pink It” methodology of marketing to women until it realized something that should have been obvious from the beginning: women’s bodies differ from men’s. Therefore products should be designed for those differences; not just painted pink. So they opted to engage in designing products for women based on their specific needs.

Just like the design of athletic wear, designing a financial plan for a woman has to be done with an eye towards those specific challenges that women face with investing and planning. Of course, every woman is different, but research shows certain issues tend to be ubiquitous.

When it comes to personal finance, women face an uphill battle. It wasn’t that long ago that the handling of household finances was seen as a man’s domain. In fact, women couldn’t even apply for credit cards in the United States until 19741. Homemakers, a historically female-only role, only became eligible to make full IRA contributions in 19972. Many women feel a cultural stigma surrounding financial conversations. In fact, one recent study found that a majority of women polled would rather talk about their own death than about personal finances3.

But these conversations are extremely important, especially considering the conundrum facing most women when planning for retirement. In a cruel irony there exists two inescapable factors that greatly affect women’s retirement planning.

The first is the wage gap. It’s no secret that there exists a pervasive wage gap between what women earn and what men with similar education and experience earn. This is a serious problem that needs to be addressed on a societal level. However, when planning for retirement, a woman is focused on solving her own individual problem. And if she’s earning less than her male counterparts, she is already at a disadvantage, having less disposable income to allocate towards retirement savings.

The second part of this conundrum is the fact that women live longer, and therefore tend to have longer retirement periods. Consider the difference in the assets needed to fund a retirement from age 65-80 versus from age 65-95. Longer life requires much more in the way of retirement savings to fund income needs.

And living expenses over a longer time period aren’t the only concern -women spend more on healthcare. On average, out-of-pocket healthcare costs through retirement trend 39% more for women than those for men4.

So when it comes to financial planning, women actually do have unique needs, making it important to acknowledge and explore with both close family and a trusted financial professional. Determining the right strategies for your unique situation is the key to ensuring you have an effective long-term solution to pursue a comfortable, secure retirement.

At Conrad Siegel, all of our consultants understand the unique planning needs of women and incorporate them into your financial plan. No shrinking or pinking needed!

1 Time.com, https://time.com/nextadvisor/credit-cards/ruth-bader-ginsburg-credit-card-legacy/, November 13, 2020
2 Chicago Tribune, https://www.chicagotribune.com/news/ct-xpm-1998-03-03-9803030185-story.html, March 3, 1998
3 Age Wave and Merrill Lynch, Women & financial wellness, 2019
4 Age Wave estimate, based off Yamanoto, D.H., Health Care Costs – From Birth to Death, Health Care Cost Institute Report, 2013; HealthView, Retirement Healthcare Costs Data Report, 2016-2017

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