According to Prudential Financial’s survey, “Financial Experience & Behaviors Among Women,” Baby Boomer women and those younger than 35 say they are far behind or have not started planning for retirement.
On a positive note, women younger than 35 have well-defined goals for their financial future. Although they frequently identify themselves as investment beginners and are less likely to say they feel well-prepared to make wise financial decisions than female Baby Boomers, they are the most likely to see financial decision-making as their own responsibility.
They also feel empowered to participate in or make decisions on their own and show a strong interest in receiving financial advice. Even so, their perceptions about retirement readiness remain similar to Baby Boomer women.
The survey indicates that women who work with a financial professional feel more confident about not outliving their savings in retirement and maintaining their standard of living than others. While women are relatively confident in their ability to achieve financial goals such as buying a house and reducing debt, they are less confident about having enough money in retirement and protecting investments from volatility.
“The whole confidence gap is really what stood out [in the survey],” Deborah Owens, CEO of Owens Media Group, said during Prudential’s press event about the study. “I really look at that confidence gap as a knowledge gap, too.”
Hiring a financial professional is one way to close the confidence gap. Many women seek advice online, from friends or family, but experts at the Prudential event said it is always smarter to seek the help of a professional.
“You’re not going to go to a mechanic when you have a heart problem,” added Lynette Khalfani-Cox, “The Money Coach” personal finance expert.
Perceived expense is the main reason cited by women in the survey for not using a financial professional, suggesting they would be interested if they did not think fees were a barrier. Women should keep in mind that it is “perceived” expense and may not be as costly as they think, said Joan Cleveland, senior vice president of business development, individual life insurance at Prudential.
Owens likened hiring a financial professional to hiring a realtor to help sell a house. A realtor, like a financial professional, can provide assistance that makes the outcome well-worth the cost.
Prudential's survey polled 1,410 American women and 604 American men ages 25 to 68.