For decades in the United States, the role of managing family finances was traditionally one that fell to a male head of household. Men made up a larger part of the workforce so it was generally assumed that they were the ones paying the bills and responsible for saving for their family’s future.
However, as more women entered the workforce in the 1960s, that dynamic began to change. Along with steady progress outside of the home, women also made strides within their own households, including their association with all things financial. In fact, according to the 2013 Women, Money and Power Study from Allianz Life Insurance Company of North America (Allianz Life), more than half of women reported that they were the chief financial officer of their household, and a full 60% said they were the breadwinner for their family.
(Related: Majority of Women Are Primary Breadwinners)
This was a logical evolution of these tasks, and one that made a lot of sense as women are often the ones handling the lion’s share of family planning — from schedules, to budgeting, to choosing the next location for the annual family vacation.
Fast forward to 2019 and women are no doubt enjoying increased levels of financial confidence and responsibility, right? Unfortunately, that doesn’t seem to be the case.
We conducted the Women, Money and Power Study in 2016 and again earlier this year, and it’s clear that women are experiencing a steady downward trajectory on a number of key points:
- Fewer women say they are the breadwinner in their household (38% in 2019 compared with 47% in 2016 and 60% in 2013).
- Fewer report having more earning power (42% in 2019 compared with 50% in 2016 and 57% in 2013).
- Fewer women say they are the CFO of their household (47% in 2019 compared with 51% in 2016 and 53% in 2013).
Additionally, fewer women say they have asked for a promotion or a raise at work (27% in 2019 compared with 44% in 2016), and they also say they feel less financially secure overall (62% in 2019 versus 68% in 2016).
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 2019 study, 44% of women say volatility in the market is making them anxious. Further, only 36% are ready to invest now based on current market conditions.
This should be a significant concern for financial professionals, but one where there is ample opportunity for action, especially when it comes to a key component of their business model — education. Simply put, too many people — particularly women — don’t have all of the facts about the products and services that can help with their financial security.
A good example can be found within the topic of permanent life insurance and how it can assist with creating a more holistic financial strategy. Via the Life Insurance Needs Study we commissioned in 2018**, we found the majority of Americans are unaware of the potential opportunity for additional living benefits and tax advantages that may be available through permanent life insurance.
We conducted the Life Insurance Needs Study again in 2019 and found a similar education gap, but this time the cause for concern was specific to women. Unfortunately, women are trailing men in their awareness about additional potential benefits that permanent life insurance can offer — knowledge that could help women build more flexibility in their (or their family’s) financial portfolio.
Only 34% of women believe that that the available cash value from a permanent life insurance policy can be used to help fund education, retirement or other financial needs versus more than half (51%) of men. Furthermore, only about one- quarter (27%) of women know that death benefits paid from life insurance are generally not taxable versus 38% of men.
Most concerning, only one-third of women believe that any available cash value from a permanent life insurance policy through policy loans or withdrawals1 can be used to supplement retirement income while you are still alive versus more than half (52%) of men who know it can be used for that purpose.