Lessons from The Golden Girls

Some new life is being breathed into The Golden Girls, a cult classic TV show about four single elderly women. A café based on the iconic characters has been opened in New York.

The sitcom, which was ahead of its time in the 1980s, featured these very different women living together as roommates during their "golden" years, and often depicted—with a certain dry, honest humor—their lack of financial preparation as divorcees and widows.

In real life, women indeed live on average five years longer than men,1 which naturally translates into a longer retirement.

Yet the need to be prepared goes beyond what's in one's bank account. It's really about how a woman envisions her later years.

“There are some women who, once their husbands pass away, they don't even know how to write a check,” said UBS Behavioral Finance Specialist, Svetlana Gherzi. “It's really important that women become more proactive, and take steps to learn how to manage their finances and sometimes just learn ‘Finance 101.’ They have to be aware of the consequences of living longer.”

According to a 2013 Aon Hewitt survey, women invested on average 6.9% of their—often lower—salaries in their 401(k)s, while men invested 7.6%.2

“There is a behavioral and psychological part of this phenomenon,” said Gherzi. “Women have less of a tendency to be in control, and men will be more likely to take control of their finances; this trait is related to overconfidence. This is reflected in these 401(k) numbers. There's also a biological component, too. There have been numerous studies that testosterone in men makes them more prone to take risks, rather than women who don't have that hormonal make-up.”

In addition, women may feel more comfortable with liquidity.

“Cash cushion is very crucial for women,” said Gherzi. “Whether it is a widow, or a divorcee, they want some assurance that they'll be fine and they'll have cash on hand in the case of emergency for them or their families. We know that philanthropy and how close they are to family are both paramount for these ultra high net worth women, too.”

It also appears that there is going to be a massive transfer of wealth to females. In fact, women are expected to inherit 70% of the $41 trillion in intergenerational wealth transfer expected over the next 40 years, according to Boston College’s Center on Wealth and Philanthropy.3

At the end of the day, taking a goals-based approach and following a long-term plan is the best way to address the financial challenges many women face and to feel more confident about their financial future. “The first step is to figure out what you value and what you want to achieve,” Gherzi said.

Key takeaways:

  • Since women, on average, live longer than men,1 it could naturally translate into a longer retirement.
  • According to UBS Behavioral Finance Specialist, Svetlana Gherzi, “It’s really important that women become more proactive, take steps to learn how to manage their finances and sometimes just learn ‘Finance 101.’”
  • According to a 2013 Aon Hewitt survey, women invested on average 6.9% of their—often lower—salaries in their 401(k)s, while men invested 7.6%.2
  • For many women, a cash cushion is essential, since they generally like to be prepared for emergencies that could potentially impact themselves or their families.
  • At the end of the day, a goals-based approach and long-term planning could help address the specific challenges women face, and build confidence in pursuing financial goals.
  • Are you confident you can retire the way you want? Talk with your UBS Financial Advisor.

Are you prepared for the unique financial challenges of a longer retirement? Together we can find an answer. Connect with your UBS Financial Advisor or find one.