Women aren't financially prepared for their futures: Should we blame biology or sociology?

By Emily Hutto


Today, one of our contributors, Ryan Parker, gave us insight on selling insurance to women based on the results of a study by the ING Retirement Research Institute. The gist: Women are financially unprepared for their futures.

He makes a critical point that women typically spend more time out of the workforce to care for children. He’s right. The Bureau of Labor says that only 46 percent of married couples in the United States were both employed in 2011, and that husbands were the only workers in 20 percent of households.

“The harsh reality of biology is that mothers face more challenges when it comes to forging a secure retirement,” says Parker. If you ask me, though, the only biological factor preventing a woman from the workforce is the time immediately before and after child rearing. From there, it becomes sociological factors that keep women unemployed.

One of these social factors is paternity leave. Many Americans are unaware that while mothers typically take maternity leave (they are entitled up to 12 weeks of unpaid leave under the Family and Medical Leave Act of 1993), fathers are also entitled to that same time off. Who’s footing the bill, though, if the household with the new baby is short 12 weeks, or 24 weeks if both parents work, of pay? Not to mention the many stipulations included in the act. For example, paternity leave is only guaranteed if the mother or father works at a company with 50 or more employees within 75 miles and has worked there for at least 12 months, among other restrictions.

According to the book, "U.S. Economy: A Compact and Irreverent Guide to Economic Life in America," the U.S. is one of the few affluent countries in the world that doesn’t give its employees paid paternity leave. An article on Huffington Post says that 66 countries in the world grant their citizens paid leave. Thirty-one countries, it says, offer 14 weeks or more.

So, despite their entitlement to time off for maternity leave, American families tend to put dad right back to work when baby is born (if he left at all) and keep mom at home. Thus the high rates of unemployment, and therefore, lack of employee benefits among women.

What can advisors do to ensure the comfortable retirements of these unemployed moms and overworked dads? What products are most appropriate for them?