Imagine that securing your financial future was as simple as punching an address into your GPS – just plug in your destination and your geo-positioning semi-autonomously responds to emergency roadblocks and detours while recalculating a route that still gets you to retirement. Wouldn’t that be great?
Unfortunately, the road to retirement requires a bit more active involvement than a global positioning system, and women have definitely gotten in gear. In fact, according to Prudential Financial’s 10th annual study, “Financial Experience and Behaviors Among Women,” a record 95 percent of females in the United States are financial decision-makers. In addition, eighty-four percent of married women are either solely or jointly responsible for financial decisions, with about a quarter of them identifying themselves as the primary financial decision maker in their household.
Over the last decade, women shifted from merely taking notice of their finances to actively participating in the financial decisions that affect their day-to-day life. Women are more aware, engaged, and actively involved in financial matters than ever before. However, they’re still not planning for their retirement goals – not good news, since retirement is such a woman’s issue.
It’s no secret that women navigate a slightly different financial obstacle course. On average, women earn less, spend less time in the workforce, have lower Social Security benefits, and are less likely to have retirement plans than men.
But, perhaps equally as important, women live longer – and longevity has significant implications. Not only do women need to save more to last through a longer retirement, but they also need to consider the effect that living longer has on health care costs. According to a recent study from the Center for Retirement Research, “Does Staying Health Reduce Your Lifetime Health Care Costs?” health care costs for a healthy married couple can be $105,000 higher over their remaining lifetime than an unhealthy couple.
While women recognize that they need to do more work to assure a successful and comfortable retirement, too few actually have a roadmap to achieve their long-term financial and retirement goals.
Optimistic after the financial crisis
The financial crisis compounded the issues presented by longer life spans and the fact that women are still not saving for their retirement. Despite the economic crisis road bump, women are optimistic about the country’s economic recovery; about one-third of women believe that they are on track to meet their long-term financial goals or are well-positioned to catch up, but acknowledge that they may need to postpone retirement.
The economic crisis has also heightened women’s recognition that they need to develop a financial plan that will meet their long-term financial goals – yet, just one-third of women have a financial plan in place. Among the youngest women, aged 25-34, that number drops to only one in 10, according to the Prudential study.
When discussing their barriers to developing a detailed financial plan, women cite a lack of time, the pull to meet shorter-term financial obligations, lack of knowledge, for many, an unmet desire for assistance and help.