What does a financial legacy mean for women today?

As baby boomers retire in record numbers, attention is shifting to how they will steward and transfer wealth to their children, grandchildren, and other beneficiaries. This process – known as the Great Wealth Transfer – is accelerating as an estimated 73 million baby boomers reach retirement by 2030.

By 2030 as much as $30 trillion will be in motion and is expected to shift in two waves. The first wealth transfer will be to surviving spouses. Women have historically outlived men, so they will likely control much of this wealth. These women, close to or living in their retirement years, will assume sole control of their finances and will command the second wave: distributing remaining assets to younger generations. The autonomy to control their financial legacies is fueling strategic decision-making regarding how their wealth should be managed and shared during the first wave as well as down the road for the second wave.

Strategies for an enduring legacy

For younger recipients, likely in the prime of their careers and family lives, the goal is for their newfound wealth to have a positive and lasting impact throughout their lifetime as well as the next generation. This puts a focus on resourceful management to protect and grow the monies so financial wellness endures.

Regardless of life stage, the circumstances highlight the importance of women having access to trusted guidance and skill-building resources that can help them confidently manage, protect, and grow the wealth now in their charge. It also provides an opportunity for women to plan their own financial legacies.

Assumptions are often made that wealth will automatically be passed on to one’s designated heirs or family. It’s not automatic, it must be planned and executed. This requires developing comprehensive financial and estate plans encompassing all assets – money, stocks, bonds, mutual funds, retirement accounts, insurance plans, real estate, and possibly more. These plans need to be carefully crafted and clearly communicated to ensure each generation knows their role and can anticipate what’s next.

Women are realizing the power of their earned and received wealth and thoughtfully considering how to ensure the next generations benefit, whether that be family, friends, or communities. While some choose to leave everything to their heirs, an increasing number are using their wealth to support organizations and causes. The focus when building a plan is on ensuring the monies don't simply make a short-term difference but leave a lasting impact.

Why now?

Women are in an unprecedented financial position. Not only are many anticipating that they will benefit from the aforementioned wealth transfer, they continue to contribute to their households via caregiving (children or aging parents) or earning outside the home. Research shows that a historic number of women are working (78%) and earning in the labor force. As a result, women are increasingly managing or having an equal say in family finances. A McKinsey study showed that between 2015-2020, 30% of married women began making more financial decisions.

Whether a woman is just starting out, is in the prime of her career, balancing caregiving, or edging toward retirement, it’s always prudent to include legacy and estate planning in a financial plan. Recent research conducted by Equitable found that two-thirds of the women surveyed wished they'd started financially planning earlier. A legacy is part of that holistic plan.

Thinking through how to share the wealth she’s built – now and after passing away – comes with a sense of agency. A financial legacy plan can direct who and what will benefit from the wealth transfer, from directives such as establishing educational plans for grandchildren’s college costs to creating an endowment to continue meaningful charitable work.

Is your plan keeping up with you?

Our dynamic world requires regularly revisiting plans, not just checking the value of financial assets but ensuring what is in place will deliver the intended impact. We must evaluate current financial circumstances and reassess any shifts in long-term vision or goals.

Confidence that their plans are up to date and consistent with current values and priorities can give women comfort that they are well prepared and will be well remembered.

Financial professionals have the experience  to identify strategies that can help plan for and build a financial legacy. Let’s plan how.