In the pursuit of financial security for all, we can’t overlook older widowed women

Image by Pexels: Andrea Piacquadio

By Christine Van Cauwenberghe

Special to Financial Independence Hub

Canada has a bold vision – to build a more accessible, inclusive and effective financial literacy ecosystem for all. The five-year plan, laid out in the National Financial Literacy Strategy 2021-2026, is an important step forward to achieving sweeping financial literacy. But one cohort is noticeably absent from this ambitious strategy – older widowed women.

During Financial Literacy Month in November, we had an opportunity to cast a light on financial education and empowerment for this often overlooked and underserved, but statistically significant, group. In 2022, there were approximately 1.5 million widowed women compared to the roughly 472,000 widowed men, reports Statista Research Department. As our nation nears “super-aged” status, where 20 per cent of our population will be 65 years or older, these numbers will continue to climb.

Longer life expectancies for women, paired with women generally marrying or partnering with older men, leaves them more likely to spend at least some of their retirement in widowhood. As such, it’s estimated that 90 per cent of women will become the sole financial decision-maker at some point in their lifetime, representing a substantial segment of Canada’s wealth management sector.

Lower financial literacy than male counterparts

However, this same group generally reports lower levels of financial literacy than their male counterparts. While many reasons account for this disparity, traditional societal norms play a significant role – older generations of women were more likely to stay home and rear children while men typically joined the workforce, granting them greater financial exposure.

Now, we have an opportunity and a responsibility to change this. Widespread financial literacy matters, but in our effort to educate the masses we can’t leave certain groups behind. By narrowing the knowledge gap, we can empower widowed women from and after the Silent Generation with a voice – we can give them a say in their own financial future.

Women will soon control half of accumulated Wealth

By 2026, women in Canada will control roughly half of all accumulated financial wealth, estimates Strategic Insights, up from one-third a decade earlier. While this is a welcomed shift, many women’s’ lack of core financial understanding and involvement is sobering. Too often, it’s men who assume a leading role in personal wealth management, specifically retirement and estate planning. This despite the fact that women, on average, survive their husbands by roughly five years. Yet, only 17 per cent of women in Canada over the age of 65 have an up-to-date will, according to a survey from LegalWills Canada.

This lack of preparedness is further compounded by the fact that less than one-quarter of widows are inclined to work with a financial advisor to help maximize their savings and a well-known 80 per cent leave their advisor within one year of losing a spouse. Limited financial acumen coupled with an absence of advice is a concerning combination for a cohort that will likely be in the financial driver’s seat at some point in their lifetime. But we can change this by actively including women in financial planning conversations before they become widowed.

We have to do better – and more. Because financial literacy improves both individual and institutional outcomes. By building targeted knowledge capacity, we can inspire older women in widowhood to play an active role in their own financial security and success. But education alone isn’t enough. To advance their economic outcomes, we must also inspire confidence.

Both Education and Confidence needed

When women lack confidence as investors, they miss out on opportunities to minimize their risk and maximize their wealth. Understanding basic financial concepts, like investing, saving, and the impact of interest rates can go a long way in accumulating and maintaining capital. Ultimately, confident decisions are born from education, understanding and awareness.

Adjusting to a lower income, limited knowledge on maximizing an inheritance from their spouse and lack of understanding around core financial concepts can all have a hand in diminishing an older widowed woman’s standard of living. By involving women in wealth planning, enhancing financial literacy and building financial confidence, we can reduce economic vulnerability among this group.

Despite mounting efforts on a national scale, older – and often widowed – women are too frequently excluded from core financial education. We have a responsibility to level the playing field by dismantling gender and age barriers to financial knowledge and resilience. Because accessible, inclusive and effective financial literacy unlocks equal economic opportunity. Together, we can help Canada bring this bold vision to light.

Christine Van Cauwenberghe is head of financial planning at IG Wealth Management.

Christine Van Cauwenberghe is the Head of Financial Planning at IG Wealth Management. She oversees the division’s three teams: the advanced financial planning group, comprising the firm’s 40 tax and estate professionals; IG University, the firm’s advisor training group; and the financial specialist network, a team that will coach advisors of high-net-worth (HNW) clients. Van Cauwenberghe is also a member of the Canadian Tax Foundation, has her CFP designation, is a registered retirement consultant, and is certified by the Society of Trust and Estate Practitioners.

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