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Industry Spotlight > Women in Wealth

American Women Confident in Their Financial Decisions: Poll

By Michael S. Fischer

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Heading into this year’s presidential election cycle, 51% of women in a new survey are feeling upbeat about their financial futures, and 42% are confident that their saving and investing decisions are on the right track, BlackRock reported Monday.

This is a big improvement over last year’s survey, when less than half of women felt positive about their financial futures and only a third were confident about their financial decisions.

For the survey, BlackRock polled 2,040 American women and 1,960 men.

It found that 43% of women and 41% of men prioritized saving to ensure a comfortable retirement. However, 65% of men reported saving for retirement, compared with 55% of women.

This may explain why 75% of women were concerned about being able to achieve their retirement goals, versus 68% of men.

The survey found that both women and men on average had similar goals for an annual retirement income: $45,018 vs. $45,956.

But a big difference emerged in actual average retirement savings for women and men in the 55 to 65 age group.

Women’s average $118,000 in savings could provide $7,872 of annual estimated annual retirement income, according to the BlackRock CoRi Index 2015, compared with men’s average $162,000 in savings, which could provide $10,807.

At the same time, only 36% of men worried about their ability to achieve the annual income goal they need in retirement, despite the shortfall, compared with a much more realistic 52% of women who were similarly concerned.

Fifty-one percent of women said they availed themselves of a workplace retirement savings plan to get started investing, compared with 43% of men.

“For women, workplace plans represent a critical step towards their most important financial goals,” BlackRock’s head of personal investing Heather Pelant said in a statement.

Pelant said this suggested that “employers need to keep the characteristics and needs particularly of women firmly in mind in their efforts to help their employees become more effective savers and investors.”

Disparate Goals

The survey found that women and men have very different ways of looking at money and investing.

Sixty-one percent of women said they followed a household budget, but only 23% regularly reviewed the performance of their savings and investments, compared with 33% of men, and 55% of women focused on paying off debt vs. 46% of men.

Men in the poll were also more likely that women to do the following:

  • Prioritize growing their wealth: 35% vs. 28%
  • Prioritize holding on to their wealth: 26% vs. 20%
  • To say “I consider myself an investor”: 40% vs. 22%
  • To have less of their assets in low-return cash: 60% of the portfolio for men vs. 71% for women
  • To say they enjoy managing their investments: 46% vs. 26%

When asked how the idea of investing makes them feel, men were likelier than women to associate words like “hopeful” and “optimistic,” while women most associated “nervous” and “risky.”

BlackRock noted that although focusing on growing wealth was a higher priority for men, it could help women. Among women who have prioritized wealth growth, 63% have investments, compared with 38% who do not make growing their wealth a priority. They are also twice as likely to regularly put money into savings and investments.

The survey found that women were generally less inclined to take on investment risk to achieve financial return and were more cautious about the future of the stock market.

And 64% reported they sought advice for their investment and savings decision-making, compared with 55% of male respondents, with 74% of women valuing professional advice, vs. 64% of men. “Overall, in deploying their money, women are more focused on managing risks to their financial security and stability over the short term, and men are more focused on achieving long-term money goals,” Pelant said.

“In fact, American women and men have a lot to learn from one another, as good financial and investment planning needs to reflect both objectives.”

Age Gap

The survey also uncovered a gap in money attitudes between older and younger women.

About a third of millennial women said they enjoyed managing investments, compared with just a fifth of boomers, and 37% of the former said they prioritized growing wealth vs. 22% of the latter.

Still, just 53% of millennial women reported they were saving for retirement, compared with 71% of millennial men, and these women were considerably less likely than their male peers to feel knowledgeable about investing.

According to the survey, women were much less inclined than men to use online support for their long-term savings and investment decisions, though again younger women may be less averse than older ones.

For all Americans, BlackRock reported, 32% used the Internet as a source of information for long-term financial decisions, with millennial men more likely than millennial women to do so.

Thirty-three percent of women of all ages were most likely to seek guidance on managing their finances from family and friends.

Men in the survey were more interested than women in robo-advisors, including 72% of millennial men, but only 45% of millennial women.

Still, millennial women express more interest in digital platforms than women in any other generation.

Millennial women in the survey who favored robo advice said they valued the convenience and simplicity of the service and appreciated that no one would be “pushing products” on them that they might not need.

“For many investors, technology is playing an increasingly meaningful role in their decision-making, either supplementing the advice of a human advisor or representing a primary source of support,” Pelant said.

“It’s encouraging that younger women are attuned to the potential benefits of technology, because — as with many financial habits — becoming comfortable with the role of digitally delivered guidance early on can yield benefits throughout one’s investing life.”

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