Although our episodes always drop on Wednesdays, many of us have Tuesday on the brain — specifically next Tuesday, Nov. 3 — Election Day. A day when we will head to the polls, or, if we voted early or by mail, simply watch the news as the returns roll in.
This year, as with every year, every vote counts. But in 2020, women are going to have an enormous impact on the election, according to research from AARP. Women are expected to turn out in record numbers, and it won’t be the first time this has been the case — according to the Pew Research Center, voter turnout has been higher among women than men since at least 1984. In the 2016 presidential election, 63% of women turned out, compared with 59% of men.
One of the reasons more women are expected to turn out this year, is, frankly, because we’re worried. AARP did a series of polls in September, in eleven battleground states, and each survey found that women are more concerned in general than men are — about coronavirus, about paying for healthcare, about the future of Social Security, and being able to afford to retire. We’re also more worried about our careers and our place in the economy. Between August and September, 865,000 women left the workforce, according to a study by the National Women’s Law Center. It’s easy to see how this year, turning up to the polls and having our voices heard seems more important than ever.
In fact, this week’s guest has even given a name to all of the fired-up women who are getting out the vote — she calls them the “worried woman constituency.” Nancy LeaMond is the Executive Vice President and Chief Advocacy and Engagement Officer at AARP. She oversees AARP’s public education and outreach initiatives, and has been named by The Hill as a ‘Top Lobbyist’ every year since 2011. She’s also a Harvard graduate who worked for many years in the government before joining AARP.
Listen in as Nancy and Jean talk about just how women voters will be influencing the election — today, there are 61.6 million women voters over the age of 50, and 95% of them have indicated that they will vote this year. Nancy discusses exactly what these women are voting for — what is drawing them to the polls.
A few of the biggest factors are healthcare, gender pay inequalities, and caregiving. Nancy and Jean weigh in on each of these issues and discuss how healthcare is really an economic issue at its core, and how when women take time out of the workforce for caregiving (there are 48 million caregivers in the country, and 60% are women) it’s never just the salary that’s lost. You also lose career trajectory, opportunities at the office, the strength of your network, up-to-date tech skills, and Social Security credits. Thanks to COVID, Nancy says the conversations we’re having in this country regarding paid leave are going to continue — in other words, the pandemic has made us all confront work-life balance, which is a good thing.
When it comes to getting out the vote, Nancy says that the turnout this year, by mail and in person, has already been substantial. She also advises that if you’re going to the polls in person, you should bring a little lawn chair so you can get comfy, in case there’s a long wait. (There are reports of long lines all across the country). Of course Jean also asks Nancy the “crystal ball” question we’ve all been pondering, which is — where are we going to be this time next week? Which candidate will be victorious?
“We believe that turnout will be very very high among people over the age of 50, especially women. We believe those worried women are going to be the deciders in this election,” Nancy says. “All eyes now are on places like Wisconsin, Michigan, Pennsylvania and, of course, Florida.”
In Mailbag, Jean and Kathryn take a question from a woman looking for the best ways to save for her niece’s future, and we hear from another listener wondering if she should scale back on retirement contributions in order to put more money toward a down payment on a home. We also check in with a listener who is looking to invest a large amount of money but is unsure where to put it. In Thrive, Jean offers a rundown on all the ways you can support female small business owners as we head into the holiday season.
Nancy LeaMond: (00:01)
We believe that turnout will be very, very high among people over the age of 50, especially women. We believe those worried women are going to be the deciders in this election. All eyes now are on places like Wisconsin, Michigan, Pennsylvania, and of course, Florida.
Jean Chatkzy: (00:22)
HerMoney is supported by Fidelity Investments. Whether you’re saving for something in the near future or way down the road, Fidelity has tips and tools to help you meet your savings goals. Visit Fidelity.com/HerMoney to learn more.
Jean Chatkzy: (00:35)
Hey everybody. It’s Jean Chatzky. Thanks so much for joining me today on HerMoney. Although our episodes always drop on Wednesdays, I have a feeling that many of you may have Tuesday on the brains – specifically next Tuesday. November 3rd. Election Day. That day where we will all head to the polls or make sure that we’ve mailed in our ballots. Or if we voted early, simply sit and watch the news, which we will probably do for several days afterward as the returns roll in. This year, every year, every single vote counts. But in 2020, women are going to have an enormous impact on the election. According to research from AARP, women are expected to turn out in record numbers. It won’t be the first time that this has been the case. According to the Pew Research Center, voter turnout has been higher among women than men since at least 1984. And in the 2016 election, 63% of women turned out compared with 59% of men. But one of the reasons more women are expected to turn out this year is, quite frankly, because we’re worried. AARP did a series of polls in September, in 11 battleground States. And each of these found that women are more concerned, in general, than men are about coronavirus, about paying for health care, about the future of social security and about being able to afford to retire. We are also worried about our careers and our place in the economy. Again, with very good reason. We’ve seen four times as many women leaving the workforce between August and September alone. It is easy to see how this year turning up to the polls and having our voices heard seems more important than ever. In fact, our guest this week has even given a name to all of the fired up women who are getting out there to vote. She calls us the “worried woman constituency.” Nancy, that is really hard to say. “Worried woman constituency.” Nancy LeaMond is the Executive Vice president and Chief Advocacy and Engagement officer at AARP, and she oversees AARP’s public education and outreach. She’s been named by the Hill as a top lobbyist, every year since 2011. She also has worked for many, many years in government before joining AARP. Nancy. Welcome.
Nancy LeaMond: (03:30)
Thank you. Thanks for having me Jean.
Jean Chatkzy: (03:31)
“Worried woman constituency.” I like that phrase, but it does not trip off the tongue.
Nancy LeaMond: (03:38)
I know, I know. It’s not as easy to listen to a soccer moms or security moms.
Jean Chatkzy: (03:43)
No. But I think that’s exactly how we’re feeling. I mean, you and I were talking before we teed up this show. I’m certainly worried. So, I count myself among them. And it’s not just about the results of the election. There’s so many things to worry about right now. Who’s worried and what are we worried about?
Nancy LeaMond: (04:05)
Well, first thing I wanted to say is that those women are a very big group. There are 61.6 million women voters over the age of 50. And they’re not a monolith, although, as you said, most of them are worried. They’re not as diverse as younger generations, but they have a range of backgrounds and life experiences. Seven out of 10 are white. Seven in 10 don’t have a college degree. Half are single. And the average income is around $36,000 a year. And one thing we know, you kind of hinted at this, which is that, as voters, they punch above their weight, especially in the battleground states. So, in places like Arizona, Florida, Michigan, and Wisconsin, they represent about a quarter of the population. But they are going to be about a third of the voters. Whenever we go to our constituents and say, are you planning on voting, 95% of them say, I’m going to the ballot box or I’m mailing my ballot to the box.
Jean Chatkzy: (05:08)
What are the biggest factors that are drawing women to the polls this year? I mean, what are we voting about? And let me just say, for my listeners, people who listen to this show, they know we don’t get political, right? And this episode is not going to get political. We want your voice to be heard, whatever it is you want to say. So, when we think about the factors that are drawing women to the polls, what are the big ones?
Nancy LeaMond: (05:38)
Well, even before COVID, healthcare was top of mind for older women. And they had an even more cautious outlook about the economy than men did. We did research in December and found that women were very involved in their family’s healthcare decisions and felt they were already having trouble affording the healthcare they needed. Remarkably, 65% said that if they didn’t manage the healthcare in their household, it simply wouldn’t get done. And nearly half of the women over the age of 50 said that they couldn’t afford to pay for their healthcare. This is remarkable because it even includes a third of women over the age of 65 who, as you well know, are already on Medicare. So, this from the beginning, was an enormously concerning issue for women. Also at the same time, in December, when we talked to them, we found that women more than men were worried that the economy was on the wrong track and that the economy wasn’t working for them personally. And so, they were, in December, more downbeat about the future. You can only imagine what the pandemic has done as people have kind of hunkered down and tried to think about both their healthcare and their economic status.
Jean Chatkzy: (07:01)
Well, and I think particularly when we’ve looked at the impact of all of the additional caregiving that is being done by women, not just of older parents, but caregiving for young children – parenting essentially – and the additional strains that that has brought. It has just forced a huge number of women out of the workforce and whether or not they come back is a question mark.
Nancy LeaMond: (07:29)
Right. Well, you know, we had done a study, right before the pandemic, that showed about 48 million people are caregivers in the country. And 60% of those are women. And at AARP, you know this, we’ve worked for many years on the caregiving issue. And we used to say, well, one of the problems is, people don’t always know if they’re caregivers. You know, they’re helping out, or they’re driving somebody to an appointment. Well, if there’s one benefit of COVID, people now know their caregivers. And Genworth did a study and said that one out of every three Americans said that they were involved in care for a loved one – whether a family member or a friend. And so, this is ,as you point out, a huge issue and becoming more of an important issue, I think, for employers and in the political arena.
Jean Chatkzy: (08:20)
Yeah, yeah, no question. I always flash on this statistic that Dr. Ken Dychtwald, who, as you know, studies aging, found in his caregiving research, and that was that the average caregiver spends $7,000 out of pocket every single year on caregiving. And that, you know, you just add that to the cost of healthcare and all of the other things that we’re bearing up under these days and it’s just astonishing. How big of a factor do you think the pandemic will be in the election?
Nancy LeaMond: (08:54)
Oh, I think pandemic is going to be an awfully important factor for older women voters. Women over the age of 65 are absolutely focused on COVID. They’re worried about getting it themselves. They’re worried about a family member getting it. And they’re quite concerned about when there will be therapeutics, when there will be vaccines available. And it is top of mind as we talk to people around the country and as we do our polling. That’s for women over the age of 65. For women 50 to 64, they’re are the horns of the dilemma that you mentioned earlier. On one hand, they’re very, very worried about COVID and all of its implications. But they’re also quite worried about the economy and especially jobs. And, as you pointed out, women have been more affected than men during this period in losing employment. And as the economy has opened up a little bit, women again are lagging behind men in getting back into the workforce. And we know, historically, it takes women longer to get back into the workforce than men. And so, they’re very, very concerned. And I think all of this is going to inform election decisions. The other thing to remember is, you know, the famous refrain of elections is, you need to understand the issue. It’s the economy stupid. Well, we tend to say economic issues meaning jobs and healthcare issues. But the truth of it is, healthcare is an economic issue.
Jean Chatkzy: (10:28)
Oh, of course.
Nancy LeaMond: (10:29)
And so, healthcare and the economy are really one in the same.
Jean Chatkzy: (10:33)
It’s interesting. Our listenership, I think I’ve told you this in the past, but our listenership is interestingly split. So, we know we are a third millennials, a third X-ers and a third boomers. So, we’ve got our daughters, we’ve got my generation, we’ve got my mother. And I am finding many of the younger women are equally worried and also equally cautious. I mean, many of the younger people I know are more cautious than I am when it comes to coronavirus precautions. And I wonder what you’re sensing about differences in how younger women are thinking about their vote and what they’re casting their vote based on,
Nancy LeaMond: (11:22)
You know, it’s interesting, you mentioned this, I did a program about a week ago with two women who talked about millennial and Z generation women. And, here I thought I was making this great perceptive observation about how worried older women were about healthcare. And they chimed in and said healthcare is probably the single most important issue to the women they’re talking to. There are other issues that are top of mind, obviously for younger people, including climate change and now jobs as well. But, healthcare is hugely important. And I’m hoping, after the election, when we all have time to step back, that we can explore that more. Because I think there is an agenda out there that unites women of all ages, whether it’s healthcare or economic security, retirement security, that we need to explore. I was saying to somebody the other day that I wake up every day and think about retirement security. And I was sitting back the other day thinking, you know, I may be focused on 401ks and social security, but the truth of it is, we need to look at it more broadly. Women are disadvantaged from their first job.
Jean Chatkzy: (12:36)
Nancy LeaMond: (12:37)
The pay inequities based on gender. Women then have to take more time out of the workforce to have children. And then they take more time out of the workforce with caregiving responsibilities for both kids and parents. So, there is a common cause there for women of all ages.
Jean Chatkzy: (12:55)
Which actually nicely tees up this piece of research that you just released with S&P Global. So, you did this big study. 1600 women who work for large companies. Some of them are caregivers for older people and other family members. Some of them are parenting young children. But you found that 60% of them across the board said that they are spending more time on all of these responsibilities, whoever they’re taking care of, and they’re stressed as a result. They are super stressed as a result. What do you think that the long-term impact of this is going to be on these women’s financial security?
Nancy LeaMond: (13:46)
Well, I think enormous. First of all, we know that so many of them are taking time out of the workforce now, either because, you know, they don’t have as many opportunities in their jobs, or because they simply have to take time out to care for loved ones. And we know that’s going to have enormous implications. Second though, I think what was also interesting in the study was that we found that close to 50% of smaller companies and 44% of larger companies are now offering some backup elder and childcare services. And this really has shown a light on the issue that confronts employers moving forward. Women have always known that they’ve had a lot of responsibilities in addition to work. But now the employers have to look at this in a slightly different way and think about the implications of all of this – the caring needs – on their employees, and, frankly, on the productivity of employees.
Jean Chatkzy: (14:51)
So, what’s the advice both for the employer, but also for the employee, right? I mean, as an employer, I run a very small company. I know a, it’s hard to hire people, but b, it’s harder to hire people in a pandemic. So, when you’re talking to employers, how do employers help the people that are working for them and for their companies? And if you’re an employee and you feel like, hey, I wish my employer would do something like this, how do you get them to flip the switch?
Nancy LeaMond: (15:24)
Yeah. As I said, I think employers are more focused on this right now. Again, there are few benefits of the pandemic, but it certainly has brought attention to issues like paid leave, paid sick leave. And I think that debate is going to continue. And employers are going to have to focus on this for the longer term. And frankly, it’s not just affecting a few women workers, it’s affecting everyone. And I believe that there is now much greater recognition of that. It started with a focus on kind of paid parental leave and, no doubt, the importance of parents being able to take time to take care of their kids. But it’s expanded now to a paid family leave environment. And I think employers are starting to see that they need to first offer information and services to their employees and then provide the kind of flexibility and jobs that we’ve seen during the pandemic is possible. And then think about the kinds of benefits like paid sick leave and paid family leave. So, that’s on the employer. In terms of our advice to employees, now’s the time to raise it. You know, for so long, women especially I think, were worried about kind of raising it in the workplace, rather than talk about a need they had. Maybe a mother who got sick and you knew she was going to be ill for a number of years. Rather than raise that, you kind of didn’t take the promotion, leaned back in your work rather than leaning in. And I think those kinds of situations, I think will be more explicit discussions down the line.
Jean Chatkzy: (17:10)
I too think that it’s really important. Sometimes we look at these decisions and we’re making them in the moment. Maybe we’ve had a baby and, you know, somebody has to stay home and we look at the wage earners in our households and we think, okay, I earn less money. So, you know, it makes sense for my family, for me to be the one to stay home. But maybe once we escape this pandemic, we can take another look at the calculation and realize that when we stay home, whether it’s to care for an older parent or to care for a child, unless this is what we really want to do, we’re not just losing this year’s salary. We’re losing seniority at our companies. We’re losing networking, we’re losing social security credits. There’s so much at stake.
Nancy LeaMond: (18:02)
Right. Absolutely. And I think the other thing that’s happened is, you know this because you’ve been helping us with this. Six years ago, we started this effort on caregiving as a public policy issue. Up until then, we, like many organizations, looked at it as kind of a personal challenge. Let’s provide people with information. And about six years ago, we developed some legislation that since has passed 43 states called the Care Act. And it’s a pretty simple concept. It says that if you go into a hospital, the hospital has to register the name of your family caregiver. And when you’re discharged, that person along with you, needs to get instructions on what to do. Very simple step. But it was the beginning of recognizing that the responsibilities of caregivers is not theirs alone. That whether it’s the hospital setting or the employer, to be honest, others had a stake in this. And now we’re seeing the emergence. I call it the care agenda. We’re seeing the emergence of it broadly in the public policy arena. We just did this polling, which you referenced earlier in 11 battleground states. And we asked about questions like, would you be more likely to support a candidate who favors a tax credit to help pay for care expenses? Would you be more likely to support a candidate who wants to give workers paid time off to care for loved ones. And overwhelmingly, in all 11 states, roughly 80%, 75 to 80% of people said yes. That I want to see this from my public officials. And even though there were some differences by gender or by party, the numbers are still very, very high – recognition that we all have to work at this. Whether it’s the individual, as you said. The woman in a workplace willing to raise some of these issues. The employer willing to engage in ways to support flexible work. And the public policy arena, finding ways to make it easier for people to provide this tremendous care. I mean, there are only a few million direct care paid workers in the country and we have what, 48 million unpaid family caregivers.
Jean Chatkzy: (20:19)
Yeah. It’s a huge, huge number. And I should have mentioned at the top that I have been working with you to move a lot of these issues forward as an AARP Ambassador. And it’s a hat that I very, very much enjoy wearing. So, thank you for letting me continue to do that. Do you think that the pandemic will make us rethink work-life balance overall?
Nancy LeaMond: (20:41)
I do. I do. I think we’re all confronting how to manage all the parts of our lives. And I don’t think we go back completely to the way it was before. I think we have more to gain from balancing both our home work and our work work, and finding ways to support one another in that regard. And I also think the way we work is changing. I was just talking to my team this morning and saying, look, I don’t think we’re going back to a situation anytime soon, where we’re flying our experts in Washington, DC out to all the state capitals to provide testimony. I can see them doing it by video conference, but I just don’t see that. So, I have to start rethinking, how are we going to deliver our advocacy across the country? We’re very lucky. We have people in every state. But all of us have to figure out how to do our work a little differently as a result of this.
Jean Chatkzy: (21:45)
Absolutely. I want to come back and ask you a little bit more about voting itself. But before we do that, let me just remind everyone that HerMoney is proudly sponsored by Fidelity Investments. Wherever you are on your financial journey, it’s important to have a plan for your savings. And that’s where Fidelity comes in. They’ll work with you to help you create a savings and investment strategy and help you fine tune it whenever life changes. Plus, they’ve got tips and online tools like their planning and guidance center that can help you meet your short and long-term goals. And you can visit Fidelity.com/HerMoney to learn more. I’m talking with Nancy LeaMond, Executive Vice President and Chief Advocacy and Engagement Officer at AARP. We are discussing how women are going to shape this election. So, let’s dig into voting. Do you have data showing how most women are voting? I mean, I’ve just been struck by the number of early voters. It’s astonishing. I voted early.
Nancy LeaMond: (22:47)
Well, we certainly have data by age that shows that the older you are, the more likely you have either voted already by mail or in person, in many States. And we expect that will continue. We think most older voters are going to try to either get to an early voting location or will vote by mail. And we have known from the beginning, our early polling, that women were more, a little more, likely than men to be voting by mail. So, we think they will vote early and we think there’ll be tremendous turnout. We’re already seeing evidence of that. You hear from across the country, the lines at voting places, and also the requests for ballots where you have to request them.
Jean Chatkzy: (23:31)
Yeah. My birthday is always around election day. Often it’s on election day. My birthday fell on the day that Nixon was elected, November 7th. So, you know, I keep that auspicious piece of data in my back pocket. This year, of course, it’s not. But I did love getting the little sticker that said I voted. That was kind of a thrill. Do you have any tips for how we can all vote safely?
Nancy LeaMond: (23:57)
Well, one for sure is to vote absentee ballot if you are very nervous about going to a voting location. And we have seen, people were a little worried early on about putting ballots in the mail, but I think a lot of States have done a very good job with dropboxes. You and I talked about this earlier. Both of us went to a dropbox and felt good about putting our ballot there. And so, we’re urging people to do it early so that they can kind of control the situation best. Second, if you’re voting in person, is to check the details of the voting location. Make sure you know where it is. Because not all voting places that are typically open are going to be open for early voting. So, check where it is and get there early. We’re also telling people if they can to bring a little chair, cause the lines seem to be quite long.
Jean Chatkzy: (24:54)
Yeah. Just think about it as if you’re hanging out to attend a concert or, or Saturday Night Live, Wear your mask. Do something like that. All right. I have to ask last question. Do you have any interest at all in crystal balling this for me in, in telling me where you think we’re going to be next week?
Nancy LeaMond: (25:14)
That’s a kind of a dangerous territory for someone in my profession. The only thing I’m willing to say is that we believe that turnout will be very, very high among people over the age of 50, especially women. We believe those worried women are going to be the deciders in this election. And we’ll be happy to follow up with you and you can give a report to your listeners on what we learned about older women voters everywhere, but especially in those swing states. All eyes now are on places like Wisconsin, Michigan, Pennsylvania, and of course, Florida.
Jean Chatkzy: (25:51)
Absolutely. And I have to say that just knowing that women are going to play such a big role in making this decision makes me feel better about the decision, whichever way it goes. I would so much rather put my fortunes in the hands of a woman.
Nancy LeaMond: (26:08)
Jean Chatkzy: (26:10)
Nancy LeaMond from AARP. Thank you so much for doing this today. And we will absolutely take you up on your offer to come back.
Nancy LeaMond: (26:17)
Thanks, Jean. Always great to talk to you.
Jean Chatkzy: (26:20)
You too. And we’ll be right back with Kathryn and your mailbag.
Jean Chatkzy: (26:28)
And HerMoney’s Kathryn Tuggle has joined me. Hey Kathryn.
Kathryn Tuggle: (26:32)
Hey Jean, how are you?
Jean Chatkzy: (26:33)
I’m good. I am good. Did you vote yet?
Kathryn Tuggle: (26:38)
I have not. I have not. I think we’re probably going to do early voting in the next couple of days, like sometime this week. But the lines have been around the block in our neighborhood. It’s been quite the scene to see just like the throngs of people lined up.
Jean Chatkzy: (26:52)
I think it is so… It makes me feel very patriotic actually to see all these people lined up to vote. I know that there are lots of reasons for it, and the pandemic, and we want to do it so we don’t have to worry about being in an even bigger throng of people on Election Day. But I was more excited to vote this time than I have been in awhile. And I always vote.
Kathryn Tuggle: (27:19)
Right. Yeah. I think that excitement is pretty much nationwide. I don’t know anybody who said I’m not voting this year or I’m not excited to vote or I don’t want to have my voice heard.
Jean Chatkzy: (27:28)
I think we have to remember too. I mean, Nancy is right. It’s not just a health issue. It’s not just a job issue. I mean, when we vote we are voting for our economic futures, right? Whether it’s the economy stupid or not, or there are other things on people’s minds, when we cast our ballot, we are having a say in so many of the things that impact our financial lives.
Kathryn Tuggle: (27:56)
Yeah. That’s such a great point. We’re voting for what we want our future to look like in every single aspect.
Jean Chatkzy: (28:02)
Exactly. Exactly. So let’s dig into maybe some of our listeners more immediate future. What else do we have?
Kathryn Tuggle: (28:11)
Absolutely. Yeah. Our first question comes to us from Kimberly. She writes, hi Jean and Kathryn. I’m a long-time listener to your show. It keeps me engaged on my commute to work. I’m 32 years old and single with no kids. I’m fortunate in these unusual times to have a stable income in animal healthcare. I currently have student loans and a mortgage for debt, and I max out a Roth IRA yearly, as well as contribute to the match of a 401k. I’m also a new aunt as my sister and brother-in-law just had a baby girl in early October. Every Christmas and birthday as kids, my sister and I were given savings bonds by grandparents and aunts and uncles. While I didn’t appreciate it at the time, I’m now starting to cash them in and those extra payments to student loans have been invaluable. I would like to be able to gift something similar every birthday and Christmas that will be my niece’s to figure out what she wants to do with when she’s older. I would appreciate any suggestions you can offer. Thank you so much.
Jean Chatkzy: (29:05)
Thank you so much for writing what a lovely, lovely question. And my initial thought Kimberly would have been to say, make a contribution to your niece’s 529 plan. If your, if your brother and sister-in-law have not opened one yet, then encourage them to open one. If your sister and brother-in-law have not opened one yet, then encourage them to open one and make a contribution there because the cost of education, as you know, from dealing with your student loans is incredibly high. And I think every little bit helps there. I also just like the symmetry from your story, using your payments for student loan repayment and helping your niece with college. Something about the symmetry of those two stories appeals to me. But there’s a problem with that suggestion based on your question. And the problem is that your niece really can’t figure out what she wants to do with that money. That money is for education. And so, if you want your niece to have more license to do whatever she wants to do with that money, then I think the thing to do is to open a brokerage account for her. It would be some sort of a uniform gift to minors account. And you could do that at any brokerage firm. And then I’d liked the idea of fractional shares of stock. Fractional shares of stock are a relatively new thing. They’re way that you can buy pieces of companies that your niece will likely hear a lot about in her future. Pieces of the sorts of companies that we talk about every single day. I think the goal when you invest in this way for a child is to bring them along for the ride. To buy them things that they’ll be interested enough in not, just because of the money that they’re making, but because it will encourage them to learn about investing. And you can add to portfolios like this all the time. You can add at Christmas. You can add at birthdays. You can add through the years. You can add dollars that your niece could then use to choose the stocks or fractional shares that she wants to buy. And maybe it becomes something that you can do together. The reason fractional shares are on my mind is that some of these companies have just gotten so expensive that buying even a single individual share of stock is much more than any of us spend on a Christmas gift or a birthday gift. So, this is a way to have your cake and eat it too. I know that you can open an account like this with our sponsor Fidelity, but you can also open an account like this in other places.
Kathryn Tuggle: (32:01)
I think that’s great advice, Jean. Thank you.
Jean Chatkzy: (32:03)
Kathryn Tuggle: (32:04)
Our next question comes to us from Dreamhouse Dreamin’ in DC. She writes, help. I really want to buy a home – especially given that mortgage interest rates are so low. But I live in Washington DC where home prices are high and I’m facing the barrier of accruing enough savings for a down payment. I’m 35 and single, and until now have prioritized retirement savings and debt reduction, which means my only outstanding debt is about $6,000 on a car loan. And my retirement account is currently worth about $325,000. I have only $32,000 in liquid savings, which is both downpayment cash and my emergency fund. It’s all in a high-yield savings account. I’ve been replaying my options over and over and I can’t seem to settle on what’s best. Should I borrow from my retirement? Reduce retirement contributions and funnel more cash into savings? Keep renting and saving as I have been and just wait until I get there someday. I make about $130,000 a year and I’ve been maxing out my annual retirement contributions for a few years. I’ll put in the full $19,500 for this year. The homes I’m looking at here or in the mid $700,000 range. I don’t have enough cash to cover a down payment, closing costs, et cetera. So, am I stuck renting until my cash savings can grow? How can I get there quickly? Thank you for all the work you and your team do. I grew up in a small town where it was common to simply live paycheck to paycheck. I haven’t had a lot of people in my life who could provide sound financial advice for my goals. So, I rely heavily on the information you all provide and it is so, so helpful.
Jean Chatkzy: (33:31)
Well thank you. And I think you should buy a house. I don’t think that you necessarily need to wait. I’m with you. I would try to take care of these low mortgage rates while the getting is good. Although I do think that the getting will be good for another couple of years. I want you to look at first-time home buyer programs, as well as loans from Fannie Mae and Freddie Mac. What you may find is that the downpayment doesn’t need to be as much as you think. Sometimes if you’re looking to buy in an apartment building, if you’re looking at a condo, you may actually have stricter downpayment requirements from that building. But if you’re looking at a house often you can get a conforming loan, which means mortgages at the best rates with a downpayment of as low as 3%. So, I would check into that because based on your math, that means that you’ve almost got enough in liquid savings for the down payment. Now, yes. You’ll need some closing costs. But I would dial back on retirement just a little bit and beef up that down payment and start actively shopping. I’d also go out and I would get pre-qualified for a mortgage, so that you know how much you’ll be able to borrow and know what your loan options actually look like. And then, in terms of those first time home buyer programs, if you go to hud.gov, you’ll be able to get a look at them. The downside in not putting down 20% on a mortgage is that you’ll have to pay private mortgage insurance and that can add a bit to the amount that you pay every month. But once you’ve paid down your mortgage to the point where you own 20%, you can get rid of private mortgage insurance. So, I wouldn’t let that stand in your way, especially right now when, again, interest rates are so low. And when, again, this is your dream, right? I mean, I knew what I was going to say as soon as I saw how you signed your letter. If this is your priority and it is clearly your priority, then you should make it your goal to buy this houses as soon as you possibly can. So, I want you to look into these options and then, if you’re having any trouble, I want you to get back to us. And if I can, I’m happy to step in and help you isolate the sort of programs that exists that may be able to serve your needs. And I would also say, you live in Washington DC, but you should probably look at the programs in Virginia, in nearby suburbs, Maryland perhaps, where there may be other programs available to you as well.
Kathryn Tuggle: (36:40)
That sounds amazing. And you’re so right. This is her goal and that’s where the focus needs to be.
Jean Chatkzy: (36:44)
Yeah. And clearly she’s been really, really successful in achieving her other goals, right? She’s gotten debt reduction out of the way, right? There’s only this car loan and it doesn’t sound like it is any sort of a debt hangover. Retirement savings of $325,000 at age 35. That is huge. And you’ve exceeded our benchmarks. So, you’re doing great. And if you need to dial back the retirement savings just a little bit in order to beef up the downpayment to make it work, I would do that.
Kathryn Tuggle: (37:20)
Yeah, I totally agree.
Jean Chatkzy: (37:22)
Good. I’m glad. I like it when we totally agree.
Kathryn Tuggle: (37:26)
Well, I did learn everything I know from you.
Jean Chatkzy: (37:29)
No you did not. You spent so many years. Don’t believe her for one second. You came in with a decade of knowledge under your belt.
Kathryn Tuggle: (37:38)
All the best pieces of my knowledge are from you.
Jean Chatkzy: (37:42)
What else we got?
Kathryn Tuggle: (37:43)
Our last question comes to us from Sarah. She writes, hi Jean. I look forward to Wednesdays because I know I’ll get to hear a new episode of HerMoney. I’m a huge fan. I’ve been listening to the podcast since the third episode, and I attended a HerMoney Happy Hour in New York when you launched Women With Money. I really appreciate your clear, actionable advice. I have a question that doesn’t often get asked on your show. How do you invest a large amount of money? To give you a little background, I’m 50, married with no kids and have a healthy emergency fund. My husband and I own our apartment, which is paid off and have no debt. Except for one joint account, we like to keep our money separate. I do know that he has a good emergency fund and retirement savings. I’ve been a good squirrel, contributing faithfully to retirement accounts every year, but I haven’t been as good about investing the money. Right now, I have $61,000 uninvested in a SEP IRA, $63,000 uninvested in a Roth, and $100,000 uninvested in a non-retirement account. I also have about $300,000 that is invested. So, with big sums, I’ve heard conflicting advice. One camp likes to dollar cost average. Another says to invest it all at once because you can’t time the market and investments go up over the long term. My instinct is to take the retirement account money and dollar cost average it over six months into the ETFs and index funds I’ve chosen. Do you think this makes sense? Also, how should I think of the non-retirement account? Should I treat all my accounts as one bucket and invest the non-retirement account money the same way? I’ve also heard you mention that target date funds lose their mojo if you mix them with other investments. The invested portion of my Roth IRA, is in a target date fund. Does it make sense to have that one account invested in a target date fund or should it mirror the SEP account? Thank you.
Jean Chatkzy: (39:24)
Boy. Lots of questions here. And I’ve never heard the expression, I’ve been a good squirrel before, but I am definitely stealing it and using it. I think that’s just great. And thank you so much for writing and for being a part of our community. I’m in the dollar cost averaging camp. If I had a large sum of money to invest, I would roll it into the markets over time. And six months, to me, sounds like a good period of time. Target date funds are only in retirement accounts. And so basically, yeah, I would put your money into, I’d either choose target date, or I would choose non-target date. Because the problem is, the target date fund is set up to be your one and done solution to give you the asset allocation that you need at your age. And if you invest outside it, you risk messing that up. So, I’d choose one or I choose the other. But I also think that this is an excellent time for you to sit down with a financial advisor and to map out your way to your goals. And even if you and your husband are doing this separately, even if you’re keeping your money separately, largely, as my husband and I do. We go to the financial advisor together and we know what our goals are to live the way that we want to live together. So, when the financial advisor plots everything out, they look at my money, they look at his money, but then they look at our money together. And it just gives us a sense of how on the path we are to actually achieving what we want to achieve. I don’t know if you’re comfortable doing that with your husband, but I do think that it would be a good idea to at least understand where you are and where he is and where you are together. And because we’re talking financial advisors, I also just want to mention, for anybody who’s looking for a financial advisor, we just launched something at HerMoney that you might be interested in. It’s a partnership with a company called Wealthramp. And I have been doing this such a long time that frequently I will get asked by our listeners, but also by people on the street, hey, could you give me a recommendation for a financial advisor. And what they want is an actual name. And although I have a handful of names that I do recommend, I don’t have names all across the country that I recommend. So, we partnered with Wealthramp, which is run by a woman named Pam Krueger. If you were a watcher of the show, MoneyTrack on PBS, then you’re probably familiar with Pam. She hosted that show for many, many years. But what she’s done in the last three or four years is to travel the country and interview financial advisors to come up with a list of financial advisors that have been vetted. So, we’ve got a questionnaire. You can fill it out. You can express what you’re looking for in an advisor. And we’ll serve up three or four different names. Usually it’s three – sometimes depending on your situation, it may be fewer – of financial advisors that, if you want, will contact you. Or if you want to be put in touch with you can be. Nobody is going to email you or call you after you’ve filled out this questionnaire. That’s just way too much contact. And we protect your information and we protect your privacy. But if after looking at these recommendations, you want to get in touch, you are able to then do that. And there’s no cost. So, I think that might be a good way for you to get going. And we’re excited about having this service to offer to our listeners.
Kathryn Tuggle: (43:35)
Absolutely. Thanks Jean.
Jean Chatkzy: (43:37)
Thank you so much, Kathryn. And for anybody else, who’s got a question, please keep these calls and letters coming. You can write us at [email protected] Lastly, in Thrive – ways that you can support small business owners as we head into the holiday season. If you ask any entrepreneur, or at least many entrepreneurs these days, they’ll tell you things are tight. Their sales at the end of this year could be what makes them or breaks them. If you are looking to support women by helping a woman stay in business through 2020 and beyond, we’ve got a great list at hermoney.com of seven ways to support female, small business owners and entrepreneurs during COVID-19. But here’s just a few of them. First, and this one probably goes without saying, but I had to mention it anyway, shop with them. And when you do, leave an online review for that company on Yelp or Google or Facebook. It’ll increase their visibility online and show other shoppers that their products and services are top notch. Second, donate and invest if you have the capital. An investment in a small business can help a woman get the traction she needs to kick off her dreams. With a donation. There are organizations that support female entrepreneurs, both locally and globally, and a quick Google search can help you find organizations with a mission that aligns with your vision. And lastly, and this option is completely free to you, invest your time and become a mentor. If you have the resources and skills, share your expertise with other women who are looking to get into business. Your voice might be just the encouragement that someone needs to chase their dreams. Over the next few months, keep in mind that for small businesses to survive the economic impacts of the pandemic, their communities need to support them. So, any gesture, no matter how small, can be the thing that helps another woman make it through the year.
Jean Chatkzy: (45:49)
Thank you so much for joining me today on HerMoney. Thanks to Nancy LeaMond for sharing her data and her insight. As we go into the 2020 election, it is so heartening to hear how much influence women have. And I hope that for all of you who have not voted yet, the lines move quickly and the wait is enjoyable, and that 2021 is a year of positive change for all of us. If you like what you hear, I hope you’ll subscribe to our show at Apple Podcasts. Leave us a review because we love hearing what you think. We want to thank our sponsor, Fidelity. We record this podcast out of CDM Sound Studios. Our music is provided by Video Helper and our show comes to you through Megaphone. Thank you so much for joining us and we’ll talk soon.