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How Do Gender and Marital Status Affect Retirement Confidence? Understanding a Woman’s Perspective

For thirty-one years, the Employee Benefit Research Institute (EBRI) and independent research firm Greenwald & Associates have been conducting a Retirement Confidence Survey (RCS) measuring the attitudes toward and preparation for retirement of American workers and retirees. As of January 2020, the RCS found that Americans had near-record-high levels of confidence in having enough money to live comfortably throughout retirement, and these levels held as late as the end of March 2020.

Encouragingly, the 31st Retirement Confidence Survey found that confidence in having enough money to live comfortably increased again to record levels for Americans in 2021. It seems the pandemic did very little to rattle investor sentiment. Over 70 percent of those surveyed reported feeling somewhat confident about their financial future, while 30 percent feel very confident.

But not everyone is feeling so hopeful.

While things may be looking up for married men and women, divorced or never-married women don’t feel anywhere near as confident. Where 69 percent of married women feel confident about retiring on time with sufficient lifetime income, just 43 percent of divorced women and 51 percent of never-married women feel the same.

Divorced and never-married women are less likely to have calculated their retirement needs or worked with a professional financial advisor, and many aren’t actively seeking information that can help them.

As a result, divorced and never-married women tend to have fewer assets entering retirement. Seventy-two percent of divorced women and 54 percent of never-married women have less than $25,000 in assets and are more likely to carry debt into their retirement years.

And of course, widowhood can affect retirement confidence, as well. Many widowed women, having left the majority of financial planning responsibilities to their spouses, find themselves trying to figure out the details of their finances late in life, all on their own.

For Women, the Numbers Just Don’t Add Up

In the realm of planning for their financial security, women face a curious paradox. On the one hand, women are expected to become even more of an economic force over the next ten years, controlling much of the $30 trillion of financial assets passed on by the baby boom generation. On the other hand, the socio-economic playing field seems to be tilted so far against them that they need to work harder, swimming against the stubborn tide of challenges, just to stay even with men in their pursuit of lifelong financial security.

Though the deck may be stacked against them, women who understand the challenges and initiate a plan to counter them have a better chance of achieving a better outcome. Consider the following statistics:

  • Women earn only 82 centsfor every dollar that men earn, resulting in fewer savings, fewer Social Security benefits, and less money in their retirement accounts.
  • Women provide most of the informal care for their family and friends resulting in reduced work hours and lost job opportunities, including promotions and raises.
  • Women are more likely than men to spend their retirement savings on helping their kids or grandkids, increasing the risk of outliving their income in later years. 
  • Women live longer than men, spending more time than men living alone at some point in retirement, resulting in greater exposure to financial risks such as inflation, higher health costs, and outliving their income. 

Having been blessed with longer life spans, women face an uphill battle against time and economics to create enough money to last over the time they have been given. Put another way, because they are expected to live longer than men, they must be able to save more, yet they have less time and money in which to do so. It just doesn’t add up. 

Many Women are Behind the Financial Learning Curve

Many women feel paralyzed when it comes to making investment or financial decisions for fear of making a mistake and losing their money. The lack of knowledge is perhaps the single biggest barrier to women getting more involved in managing their investments, and it is a reflection of a lack of financial confidence.

For women who do invest, however, most feel they will be able to meet their financial security needs. This is positive news for any woman who is hesitant to take charge. Once the plans are set in motion, confidence tends to rise.

In the financial world, where making investment decisions involves choosing among dozens of often complex vehicles, the issue is less about being able to do the math and more about being able to decipher how financial instruments can help them achieve their goals. Being able to find good information and reliable advice is a crucial component of positive outcomes. 

It’s Still a Man’s World in the Financial Services Industry

To that end, the financial services industry has really under-served women. Amazingly, most financial services companies have yet to recognize the sudden emergence of women as wealth-holders, top earners, and captains of industry. Thus, they have yet to align their resources in a way that can accommodate the steeper learning curve that women face. 

The media has not done much better. In the top 10 women’s publications in terms of circulation, only a tiny fraction is geared towards personal finance. Just 3% of the editorial content covers topics in personal finance, and only 1% of the advertising is devoted to women’s finances. I think we can all agree that we can do better!

In addition, the wealth management sphere continues to be dominated by males, with just 15 percent female representation in financial advisory firms. This bias is not lost on women as an increasing number are expressing deep dissatisfaction with the way financial services companies have tried to engage them, citing a lack of awareness of the cultural differences between men and women. Generally, women don’t feel that the way products and services are offered reflect their particular needs or preferences.  

Overcoming the Challenges = Increasing Confidence

Challenges are not barriers to success, and women who take control of their financial futures most often gain confidence once they start tackling these challenges head-on. It starts with a thorough understanding of what matters most to you in life, and manifests with the help of a well-conceived, personalized plan.

At Northstar Financial Planning, we have an intimate understanding of the challenges women face and the expertise and resources to cater to their unique needs. After all, we are all women ourselves. If you or a loved one are in need of comprehensive financial guidance, the team at Northstar is here to guide you. We invite you to schedule a complimentary Get Acquainted call with us so we can learn more about your situation.

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