According to a recent study by Allianz Life financial confidence among all women is on the decline. The fact that women are living longer than men seems to be putting stress on their ability to plan their finances for sometimes decades longer than men.
“These findings were quite surprising because women have come a long way when it comes to our roles in work and family, yet we don’t feel prepared financially,” said Aimee Lynn Johnson, vice president of financial planning strategies for Allianz Life, in released comments. “This begs the question, at a time when women are accomplishing so much, why aren’t they feeling more empowered about their financial future?”
Johnson discussed with Fox Business what women can do to have more confidence about their financial future. Here is what you need to know.
Boomer: What contributes to the fact that financial confidence among women is on the decline?
Johnson: I think most people would agree that women have come a long way regarding our roles in both work and family. Yet, despite this rise in social power, women are experiencing a downward trend across several key financial issues.
According to data from the recent Women, Money and Power Study from Allianz Life, women are taking a step backward when it comes to their financial lives. Between the initial study in 2013 and our most recent version earlier this year, fewer women say they are the breadwinner in their household – 38 percent in 2019, down from 47 percent in 2016, and 60 percent in 2013.
In addition, fewer women say they have more earning power than ever before – 42 percent in 2019 compared with 50 percent in 2016 and 57 percent in 2013 – and fewer women say they are the CFO of their household – 47 percent in 2019 compared with 51 percent in 2016 and 53 percent in 2013.
As a result, over half of all women now say they wish they were more confident in their decision making.
So what’s contributing to this decline in financial confidence among women? There are several possible factors, including the large population that is near or in retirement, career and family dynamics that are leaving women less time to focus on their financial strategy, and complications caused by both longevity and widowhood.
Another likely culprit worth recognizing is ongoing volatility in the market. According to the study, 44 percent of women say volatility in the market is making them anxious. Further, only 36 percent are ready to invest now based on current market conditions.
Boomer: When it comes to financial planning, should both spouses be involved?
Johnson: Absolutely! I think many couples, and especially boomers, are still trapped in a traditional financial planning dynamic that saw men with full control over finances and little to no involvement from their wives. In fact, women feeling left out of financial planning conversations is another contributing factor to their decline in financial confidence.
Of married/partnered women that are working with a financial professional, an increasing number say their financial professional treats their spouse/partner as the decision maker (60 percent in 2019 compared with 51 percent in 2016), which may cause women to feel less independent (81 percent in 2019 versus 87 percent in 2016) or confident (83 percent in 2019 versus 91 percent in 2016) as a result of working with a financial professional.
There’s no reason why both spouses shouldn’t be involved in the financial planning process. It ensures that everyone is on the same page about goals and the steps necessary to achieve those goals, and also makes it easier if one spouse dies unexpectedly. Since women typically outlive men, women are more often the ones that have to live with the results of a good financial strategy, or a lack thereof.
Furthermore, both spouses should have a complete understanding of where the money is, and how to access information and accounts. Even if one spouse isn’t as involved in making money management decisions, it’s important for them to know where the money is and how to access it if circumstances change. Although I always advocate engagement, at the very least both spouses should be prepared.
Boomer: Going forward, what can female boomers do to protect their golden years?
Johnson: As female boomers approach their golden years and plan for a long and satisfying retirement, finances should be a center point of the overall planning. They should start by working to learn more about money via technology or apps that can help them build a foundation for their personal financial and investment strategy.
Another easy thing female boomers can do to get more engaged is to simply start talking about finances. Although many boomers no doubt feel that discussing finances is a taboo subject, we need to remove this stigma. Talking about finances shouldn’t be scary whether it’s with friends, family, or your partner or spouse.
Last but not least, it’s important for female boomers to connect with a financial professional who understands their family dynamics and specific needs and wants when it comes to money.
Unfortunately, only a quarter of women in our study said they currently have a financial professional, which is down from 30 percent in the 2016 study. Seeking out a financial professional who understands some of the unique financial challenges that women face today is a smart way to build more financial confidence and get on the path toward creating a better financial future.