Women have made enormous gains—socially, professionally and economically—in the last few decades. And progress is being made on challenges that remain, such as the ongoing wage gap with men and balancing work with life’s other demands.


On this episode of Merrill Perspectives, hosts Candace Browning, Lorna Sabbia and Marci McGregor offer practical steps and actions women can take today to help them work toward their best financial futures. Their conversation covers a wide range of topics—from tips and ideas for negotiating salary and promotions, to how women can make longevity their “best asset” in planning for retirement. And they explain why women’s unique life journeys, which often include cycling in and out of the job market to care for children or older loved ones, call for fresh and different approaches to how they save, invest and plan for the future.


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The Merrill Perspectives Podcast Episode 8: "Women Ri$ing" with:

  • Candace Browning Head of BofA Merrill Lynch Global Research
  • Lorna Sabbia Head of Retirement and Personal Wealth Solutions Bank of America
  • Marci McGregor Senior Investment Strategist Merrill and Bank of America Private Bank




Women across this nation smashed barriers in this year’s historic midterm elections. (MSNBC Nov 7, 2018)


More companies are going public with women CEOs this year… (CNBC Jul 5, 2019)


According to the U.S. Census Bureau women, make about 79 cents for every dollar a man earns. (CBS News Apr 4, 2017)


The U.S. women’s soccer team is now on their way back to the United States after yesterday’s huge world cup win and the crowd did not just erupt in this victorious roar for them, they also started chanting for equal pay. (MSNBC July 8, 2019)


Candace Browning: Politically, socially, economically, women are making headlines in big ways, whether it's the record number of women now serving in Congress or the fight for pay equity happening everywhere from Hollywood to the boardroom, to the soccer field. Clearly women are making their voices heard.


And on top of that, women are more financially empowered than ever. In fact, it's estimated that women globally will control about $72 trillion in private wealth by 2020 and that's double the level of 2010. (Source: Boston Consulting Group, 2016.)


But while the progress women have made on many fronts is really encouraging, there's still a long way to go.


[Theme music]


Candace: You're listening to Merrill Perspectives. I'm Candace Browning, Head of BofA Merrill Lynch Global Research. And with me is Lorna Sabbia, Head of Retirement and Personal Wealth Solutions for Bank of America.


Lorna Sabbia: Hi, Candace:


And Marci McGregor, senior investment strategist, Merrill and Bank of America Private Bank.


Marci McGregor: Hello!


Candace: Today we're going to look at the power women are having in the economy and their own finances. We'll look at how far women have come in recent years and the challenges they still face. And we'll discuss ways women can take control of their finances at every key stage of life.


So Lorna, Marci, you heard those news clips. What's your take on where we are right now?


Lorna: Yeah, I think this current social environment probably in my opinion, provides the perfect opportunity to surface all topics that are impacting women. And you can feel the momentum. And I think that's the part that's super exciting and a real opportunity for us to talk about what we're about to talk about today.


Marci: There's certainly room for progress, but movements like Me Too and Times Up are really putting a spotlight on these issues. And sometimes it takes a little bit of sunlight to dry things out.


Candace: Well that's what we're going to do today is shine a light on it. So clearly a lot still needs to be resolved and a very important part of that is of course pay equity. And some of the numbers are actually pretty sobering on that front.


In fact, at the current rate, of progress closing the wage gap with men could actually take about 200 years. (Source: World Economic Forum, 2018.)


So why is this proving to be such a tough number to tackle?


Marci: So I think the key drivers here that would get us to parity are going to be education, employment and entrepreneurship. But another challenge I think it's worth discussing, is studies have shown a third of Americans believe the pay gap is fictional, and that really helps this persist.


Candace: But why do you think people think it is fictional?


McGregor: That's a great question. (Laughter). Maybe it's for Americans that haven't experienced it themselves, in their own careers. And maybe they find it hard to believe that this could be happening in 2019.


Lorna: I also think it's probably because it's such a taboo topic, we just don't talk about it. Right. So when I think about the conversations that I have with my female friends, there's a lot that we do talk about, in detail. Finances, what we get paid, what we save, what we think about retirement, what type of investments we make, we never talk about that. I think the biggest part of this is it's just taboo.


Candace: So Lorna, when you look at the pay gap and the fact and factor in career interruptions into that, a woman's lifetime earnings, on average, is actually about $1 million less than a man's. (Source: “Women & Financial Wellness: Beyond the Bottom Line,” A Merrill Lynch study conducted in partnership with Age Wave, March 2018.)


What does that mean for how women should think about planning for their financial futures?


Lorna: Right. And I think that's important to provide a little bit more context. We think about this as the million dollar wealth gap. And we actually did do a study in partnership with a company called Age Wave on women and investing. And it really spoke to the different life experience that most women have as compared to men. Probably the biggest career interruption is around caregiving. And most oftentimes that's stopping their career to raise their own children. Oftentimes that simultaneously taking care of loved ones as well.


And so when you think about a woman taking 40% of their work life time outside of work, then think about the disruption, not only of income, it's of savings. It's of the opportunity to invest in a 401k at their employer or even a health savings account, potentially. And what we also find is when women do return to work, oftentimes they're making 20% less versus the income that they left.


So the magic on that obviously is to recognize that as a potential in your life course and to ensure that you're starting to save earlier, to actually account for that. It's not easy to do, but if you're aware of it, it will actually help you.


Candace: So we know that women are likely to earn less over a lifetime than a man. But we also know that women tend to live longer than men. There are, for instance, nearly three times as many women over the age of 90 as there are men, which is an amazing statistic, I think. (Source: U.S. Census Bureau, 2010.)


We're going to hear now from Ellen DeMoney. She put her career as a research scientist on hold to stay home and raise three boys. As she and her husband start to look ahead to retirement, Ellen worries about the effect her choices may have had.


Ellen DeMoney: Will we have enough money to live comfortably and not worry as you get older in your nineties? And I think most women probably worry more than men about it because we have either sacrificed our career or sacrificed money in order to have children.


Candace: So Ellen’s probably right. A lot of women probably share these worries. So Lorna, should she be worried? What are some of the issues that she should consider about her financial future and how might she prepare for them?


Lorna: As you approach retirement, as you're going into retirement, I think it's natural for folks to start questioning, is this a good idea? Am I really truly prepared? You know, at the end of the day everybody has different comfort levels as to the risks that they want to take on. So to me that answer is very different individual to individual.


I would advise folks to think about what are those things that make you most uncomfortable and what are the solutions out there that can actually help either take that risk off the table or at least supplement what you're currently doing as well.


Candace: Marci, what are the financial implications of this longer longevity for women, including also higher healthcare costs over that lifetime?


Marci: I say for women, it's so important to invest early and invest often. Make longevity your best asset in terms of retirement because your money can work for you for longer. Consistency is really the key here. So if you invest early, you invest often, and you're consistent about contributing, I think that's as women, how we address these challenges.


Lorna: If you're living longer, it's more expensive. If your health care costs later on in life are higher on average than men, then you have to have the opportunity to have savings to tap into if you want to self-fund that.


The other thing is there are investment vehicles that are designed to help you to save for health care costs. I think of the health savings account, which I think is probably one of the most misunderstood savings vehicles out there, but it allows for tax benefit if you're saving for healthcare costs, at any time during your life. And if you do not have to use it for health care, it can continue to grow and you can invest it in the market, too.


So it can be a savings and it can be an investing vehicle as well. And when used for health expenses, there's a tax break. So it's before tax dollars going in, it's growing tax deferred. And when you use it for health care expenses, you actually do not pay taxes when you take it out.


Marci: I would also just stress how critical it is for us to have a plan, whether it be for your investments or for taking care of higher healthcare needs or whether it's estate planning or legal needs. A lot of these topics come up later in life. So it's really important to have this plan that you can refer back to. I call it the roadmap. If you have the roadmap, you can always refer back to it and help you make key decisions.


Candace: So we know that women tend to live longer than men. We've been discussing that, but it can be hard, especially when you're young, to think about the next year, let alone 30 or even 50 years from now.


Let's hear from Leah Collins, a 36 year old tech training specialist from Washington D.C. who's facing this very challenge.


Leah Collins: I’m so short-term focused—and when I say short term I really think about like within the next year. It’s even hard for me to think about the next two years. I keep saying by the time that I’m 40, I would like to buy a house, but I am really doing things day to day or month to month. I’m just kind of like cruising on the same path I’ve been on.


Candace: So like most of us, Leah clearly has goals, but it can be hard to plan for a distant future when you're so young. So Lorna, how do women like Leah, who are really early in their careers or maybe just starting to raise families, plan for old age when it's so far away?


Lorna: Great question. I don't think Leah is alone in how she thinks about it. I think the easiest place to begin is to understand your budget and you know, what you earn, what your expenses are and understanding the debt that you carry and the implications and characteristics of that debt.


In her case, she was talking about buying a house. The reality of that coming true and when, right. And I think going back, Marci, to what you were saying, as far as, you know, having a roadmap that allows you to course correct. So if that's the intent of buying a house, then it can inform you to the reality of what type of house, what range of costs, you know, can you be comfortable with and therefore time horizon, when is that something that you can actually afford?


Candace: So we've been talking about budgets and an important part of the budget is how much money you're going to get coming in the door regularly. For women, they may take some time off from work to raise children or to care for loved ones and they might also be passed over for promotions for those very reasons, cycling in and out. So how can women navigate around that?


Lorna: I think it's really around making sure that you make your intentions known. It's okay to be candid around your personal goals and whether that's raising a family or providing that care. I know for me personally, we had a situation in my own family, my dad got sick and he was sick for a really long time. But I didn't identify myself as a caregiver. I never talked about it at work. It just became this really heavy, important thing that I needed to do outside of work. And looking back, that was probably the worst thing that I did.


I think there's a lot of folks that think, let me put my head down, let me, you know, be a really good performer at work and good things will come to me and hopefully my manager or my advocate, my sponsor can read my mind and know exactly what I want to be when I grow up. I think we have to meet everybody halfway and be super candid about what's going on outside of work because it certainly informs what's gonna happen inside of work, too.


Candace: If you think about it, one important component or way to close the gender pay gap is actually to negotiate better for compensation.


So let's hear about that topic from Leah Collins.


Leah Collins: I think the hardest part for me is any time I have started a new job, I have been afraid to ask for more in salary negotiations. And so I have to tell myself to think like a man, where in my mind I should be so grateful they’re offering me X amount of dollars.


Candace: Leah made a really good point there about promotions and negotiating and salaries. And it ties into what we were talking about earlier about women having to advocate for themselves and some of these difficult situations, particularly around caregiving. So how can women get better at these types of conversations and really start to understand our real value?


Marci: I know especially earlier on in my career, I was not as vocal as I should have been about my goals. I was very guilty of putting my head down, doing good work and always trusting that it would be recognized when the reality is no one cares about your career more than you do.


Studies have shown that women are negotiating for raises and promotions now just as often as men, but they're often less likely to see a positive result. So on one hand it's really important to raise the conversation. But on the other hand, I think women almost sometimes need to campaign more for a promotion. And that's where sponsors and mentors, someone pulling you up, becomes so much more critical for women in the workplace.


Lorna: It's this taboo topic still, right? So we still don't say, what does it feel like to sit down and have a year-end review or negotiate for potentially a salary increase. We don't talk about that. And so I think a lot of women, Leah may be one of them, feel that they're isolated on this topic. For me it comes with practicing, asking and asking often and getting good at that.


I think back to a really important moment in my personal life when I was about to buy my first car. My dad comes with me to the dealership and I watched him negotiate the entire process with the salesperson who is just looking into the eyes of my dad and I think he was trying to do the right thing by his daughter and take care of his daughter.


But looking back it would've been better for me to try my hand at negotiating. You try that behavior, you get really good at that behavior and that behavior doesn't seem like a moment in time. It's just in your DNA.


Candace: So we've been talking a lot about how there's a pay gap and an earnings gap between men and women, but there's also a lifetime savings gap. And our research suggests that that lifetime savings gap is around $400,000, which is huge. (Source: “Women & Financial Wellness: Beyond the Bottom Line,” A Merrill Lynch study conducted in partnership with Age Wave, March 2018).


So Marci, what are some of the things that women can do to counter this?


Marci: So one of the key things I think as women we should understand when we look at our investments in our portfolios is, your risk appetite and your time horizon are two of the most important decisions you'll make. And as we know that women tend to live longer, on average, that should be factored into our time horizons because we may not be taking the appropriate amount of risk as investors.


The biggest decision you make as an investor is often your allocation and understanding what your time horizon is, how it may be different from a life partner’s time horizon is going to be key here as well.


Candace: So you mentioned everybody has different risk tolerances and different goals. But I would be curious, are there any sort of general differences between actually how men and women tend to invest?


Marci: So there's a perceived confidence gap between male and female investors. And I use the word “perceived” because there's actually no data that shows that there is an education gap. And I think this has a significant impact on our behavior as investors.


What's interesting is women actually tend to be successful investors, I think for two key reasons. One is women are often open to taking advice. So whether it's a mentor in your financial world or a professional, women will take guidance in terms of their investments in their portfolios, in their savings. And then also women tend to be more patient and how that manifests is actually less turnover in their investments


Lorna: What you're talking about is really important and it assumes that a woman is investing. I have literally my best friend in the world, wildly successful. She was investing in the benefit programs at work, but she wasn't investing her savings. And so she came to me and said, you know, what do you think?


She took another 12 months before she invested dollar one and it was her doing her due diligence. Because I think as women we want to be expert, whether it's at work before we ask for that promotion or even investing before we begin. And I think the challenge there is we need more women to begin to invest faster because they're actually really good investors to everything that you just said.


Candace: So to wrap things up, are there other steps or actions that women could consider to help them feel more empowered about their financial future and also more confident in navigating the obstacles that they might encounter in their different journeys?


Marci: My big takeaway from this conversation is we should seek a mentor, have these conversations. It's so important. We often talk about mentors in terms of our career and in terms of, you know, promotion and things like that. But why not have a financial mentor and someone to just either learn with or read with or you know, share articles with.


We all know the statistic, 61% of women would rather talk about their own death than their finances. (Source: “Women & Financial Wellness: Beyond the Bottom Line,” A Merrill Lynch study conducted in partnership with Age Wave, March 2018).


I think we can work together to overcome that.


Lorna: I couldn't agree more. I think what we're doing today is talking about the very issues and I would love to see that continue. But I also would urge folks to look to their employers not only for the benefit programs but for, you know, financial education and support that they would provide.


I think a lot of companies, to your point, Marci, are interested in making sure that their employees are financially well and therefore more productive in the workplace.


Marci: At the end of the day. I really think investing is about independence and it's about empowerment.


Candace: So we need to take control of our own lives.


Marci: Absolutely.


Candace: Lorna and Marci, thanks for your insights.


You've been listening to Merrill Perspectives. I'm Candace Browning, Head of BofA Merrill Lynch Global Research.


And my cohosts have been Lorna Sabbia, Head of Retirement and Personal Wealth Solutions with Bank of America and Marci McGregor, senior investment strategist, Merrill and Bank of America Private Bank.


We hope listening to Merrill Perspective inspires you to make the most of your financial life.


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Thanks again for joining us.


This podcast was published on September 25, 2019.


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