Women Boosting Savings, Investments as They See Recession Ahead: Survey

Sixty-eight percent of women in a new survey expect a U.S. recession, but they are redoubling their efforts to secure their financial futures, HerMoney and the Alliance for Lifetime Income reported Monday.

The survey, part of the organizations’ State of Women in 2022 study, examined women’s economic outlooks and the trade-offs they say they are willing to make to maintain control of their financial futures.

Facing a cloudy economic outlook, 92% of respondents said they plan to maintain, or even increase, their contributions to retirement accounts, including IRAs and 401(k)s.

“Despite believing a recession is on the horizon, women aren’t letting that interfere with their long-term financial goals,” Jean Chatzky, HerMoney’s chief executive and a fellow at the Alliance for Lifetime Income, said in a statement.

“Not only do women say that they will stay committed to saving for retirement, two-thirds plan to ‘double down’ on their investments and adopt a now-is-the-time-to-buy mindset.”

If the U.S. should enter a recession, women in the survey said they are willing to be conservative elsewhere. Only 5% would borrow for big purchases, while 71% said they would put off big purchases entirely and 24% would pay only in cash.

The online survey was conducted from Oct. 4-17 among some 1,100 women who were members of the HerMoney community. They ranged in age from 18 to 75 and older; most were college educated and employed full time; and nearly two-thirds were married or partnered.

Controlling Purse Strings and the Clock

Eighty percent of respondents said they preferred to make financial decisions themselves rather than defer to a decision-making partner. This preference was the same for both partnered and single women.

That said, participants indicated that they did not mind sharing the breadwinner role. The sample was split nearly 50/50 between those who are the primary breadwinner in their household and those whose partner is.

In addition, women are also overwhelmingly focused on taking control of their time, according to the survey. Sixty-one percent of respondents said they would prefer to earn 10% less money and have 10% more time than sacrifice their time to earn more.

Not only that, 74% said they would prefer to earn less money in a low-stress job than to take on a stressful job to earn more.

Willing to Make Some Trade-Offs

Although women are protective of their time, the survey found that a notable majority of working women are ready to make short-term sacrifices in the name of their financial futures.

Seventy percent of respondents in the workforce said they would prefer to max out their annual 401(k) contribution than use $20,500 toward a short-term goal.

Eighty percent said they would do the same with their annual IRA contribution rather than buy a $6,000 luxury item.

Seventy-nine percent of working women said the top trade-off they would make to be able to save for retirement is limiting purchases of luxury goods.

Millennials are the most likely to make other sacrifices, the survey results showed. They are significantly more likely to limit memberships and subscriptions and make housing trade-offs than Gen Xers and baby boomers.

Upon reaching retirement age, 85% of working women said they would prefer to delay Social Security to increase their benefit over time than take benefits right away.

“Our research finds that most women, especially as they age, prefer to have a portfolio that generates retirement income they can count on,” Jean Statler, chief executive of the Alliance for Lifetime Income, said in the statement.

Statler noted that 83% of working women would choose a portfolio with reliable retirement income over a risky portfolio with potential for higher returns, a figure that jumped to 88%, among boomers.

“Women have told us time and time again that they prioritize saving and have peace of mind when they know they have enough protected income to last throughout retirement,” she said.