Despite often being primary breadwinners, nearly half worry about possible destitution
BY JOHN SULLIVAN, ADVISORONE, March 28, 2013.
Irrational fears are often a source of amusement: aliens, monsters, 1950s Gort-style robots gobbling old people’s medicine for fuel. On the surface, degenerating to the point of a destitute bag lady might elicit a smirk, but a new study from Allianz Life makes clear it’s nothing to laugh about.
Although 60% of women say they are the primary breadwinner in their household and more than half (54%) describe themselves as the household “CFO,” nearly half of all women fear becoming a “bag lady,” according to the 2013 Women, Money & Power Study.
The study, conducted with women ages 25 to 75 with a minimum household income of $30,000 a year, revealed this fear extends to all corners of life and affluence, and was highest among single respondents at 56%, but also a significant concern for divorced women (54%), widows (47%) and married women (43%).
Despite feeling more empowered about financial planning and having more responsibility for financial decisions than ever before, many women believe that empowerment is potentially alienating to both men and other women. Forty-two percent said they believe financially independent women are intimidating to men and often end up alone, while nearly a third (31%) said those women are hard to relate to and often don’t have many friends. This feeling was even higher among single women at 47% and 32%, respectively.
“When Allianz Life conducted the initial wave of [the study] seven years ago, we discovered that women everywhere—even well-educated, successful, financially independent women—have major gaps and unmet needs when it comes to achieving comfort and confidence with money,” Allianz Life vice president of consumer insights Katie Libbe said in a statement. “Today, women clearly feel more invested in financial planning, however, fears of fiscal failure still persist. The real message here is that the financial services industry needs to help women learn about money and prepare for their retirement.”
Age of the Financially Empowered Woman
Despite lingering insecurities, women feel more empowered today about financial planning and are more responsible for financial decisions than ever before. Fifty-seven percent of all women surveyed said they both “have more earning power than ever before” and also “handle major investment decisions and retirement planning.” More than half (55%) noted they take the lead in suggesting new investing or retirement ideas, and 60% said they were responsible for handling tax preparation and planning.
More than 90% of women surveyed agreed that in today’s world, women need to be significantly more involved in financial planning than in the past, with the highest response (96%) coming from divorced women. Sixty-seven percent of women surveyed said that becoming more knowledgeable and involved in managing their finances has improved the quality of their life, with the highest response (71%) coming from single women.
Financial Crisis Drives Behavior Change
The financial crisis of 2008-2009 was a major driver of this behavioral change, with seven in 10 (68%) saying they have increased their financial involvement since the crisis, particularly women ages 45-54 (72%) and widows (75%). Yet, despite the increased involvement after 2008, 43% of women surveyed said they don’t feel any smarter about how to manage their money than before the crash. That feeling was shared by 36% of women with the highest income (household income of $200,000 or more).
This builds on the idea that, in addition to the bag-lady concern, a majority of women still have significant concerns about retirement planning and their level of preparedness for retirement. When asked what key issues will have the greatest effect on their retirement outlook, “lack of adequate retirement savings” was the highest ranked issue by 43% of women surveyed, besting other economic concerns such as “the future of Social Security,” “rising health care costs,” “unemployment” and “tax changes.” Similarly, retirement is the worry that keeps most women up at night. Second only to loss of spouse/significant other, “running out of money in retirement” is a worry that keeps 57% of women up at night and is the No. 1 worry for single and divorced women.