Women are confident in managing their everyday finances, paying bills each month and following a budget, but they are struggling with saving for retirement, according to a new study from Bank of America.
The study, which gauged how women rate their financial health, found that 36% of women reported struggling to save for retirement and 27% have difficulty building wealth. According to the report, “Women, money, confidence: A lifelong relationship,” 70% of women surveyed said they are not struggling to pay their bills each month and 53% said they are following a budget, while 44% are struggling to pay down debt. Also, 44% reported challenges in saving for emergencies.
For women’s financial and retirement confidence to increase, gaps must be closed, said Lorna Sabbia, head of retirement and personal wealth solutions at Bank of America, in a release.
“True financial freedom requires both short-term and long-term planning, and the confidence to take action,” she said. “It is imperative that we give women the tools and resources to take charge of their financial futures, and to close the gaps between confidence, empowerment and action.”
Overall, 48% of women surveyed reported feeling confident about their finances and 28% feel empowered to act, according to the study.
Saving for retirement topped the list of short-term (49%) and long-term (54%) goals, but 20% of women are without a financial plan, the study found. Additionally, 57% of respondents said they have not figured out how much they will need to save for a comfortable retirement and 40% are not confident they will live comfortably in retirement.
“While [women] continue to make financial progress, they are disproportionately affected by taking time out of the workforce,” the report states.
Women’s financial planning and retirement confidence also varies by demographic: 35% of white women and 37% percent of Asian American women reported having long-term plans, while 20% of Black and Hispanic women surveyed reported having such plans. And among women who identify as LGBTQ+, 21% reported having long-term plans.
The economic effects of the pandemic were widespread, but women were more likely than men to be laid off or furloughed during the COVID-19 crisis. Gender pay disparities, time out of the workforce and disproportionate caregiving responsibilities for elders and children were longstanding challenges to women’s retirement preparedness prior to the pandemic.
“Women’s financial planning should consider potential career interruptions and their impacts, with about half of women reporting that they left the workforce and often returned to less rewarding or lower-paying jobs,” says the report.
A Nationwide Retirement Institute survey published early this year found that women’s retirement confidence has dropped because of the COVID-19 pandemic, as 18% reported feeling on the wrong track for retirement and the same percentage expected to retire later than they originally planned.
When the Bank of America survey asked what women’s top financial regrets were, 44% said not saving and investing earlier. Women also said they would have invested more of their money (26%), educated themselves more about money (23%), taken less credit card debt (21%), chosen a career with higher pay (19%), lived within their means (18%) and taken better care of their health (14%).
The study also found that while women are less confident than men in investing long-term, women ages 22 to 39 are “more comfortable having financial conversations than older counterparts ages 65 and older, including talking with financial advisers (73% vs. 64%),” although 55% of women respondents reported never working with an adviser.
The survey did find that women experience near equal influence on financial decisions such as paying bills—68% of women and 67% of men. In addition, 63% of each group reported having influence on determining a household budget. But less than half of women (46%) reported feeling that they have the same sway in decisions on household investments, versus 64% of men.
Among women, the top hurdles they said are holding them back from investing are insufficient savings to invest (38%); lack of knowledge (32%); and that investing is too risky (22%).
The survey data are from a nationwide Bank of America survey of people ages 22 and older. Ipsos conducted a 21-minute online survey in February 2022 among a representative sample of more than 3,500 women and more than 1,200 men, using quotas to ensure results were representative within gender by age, race, income and assets, marital status, employment status and education.
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