Bank of America announced findings from a new body of research on women and financial wellness, which finds that 94% of women believe they will be personally responsible for their finances at some point in their adult life. Despite this, about half of women (48%) feel confident about their finances and only 28% feel empowered to take action.
The study, which has been published in a new report titled Women, Money, Confidence: A Lifelong Relationship, gauged how women rate their financial health, with a majority of women reporting they are doing well managing their day-to-day finances, like paying their bills every month (70%) and following a budget (53%), however they are struggling with longer term actions like paying down debt (44%), saving for emergencies (44%), saving for retirement (36%) and building wealth (27%). One-in-five women (21%) acknowledge that it is time to make a change to their finances.
“True financial freedom requires both short-term and long-term planning, and the confidence to take action,” said Lorna Sabbia, Head of Retirement & Personal Wealth Solutions at Bank of America. “It is imperative that we give women the tools and resources to take charge of their financial futures, and to close the gaps between confidence, empowerment and action.”
This new study continues Bank of America and Merrill’s extensive research efforts exploring women’s unique life journeys and how various factors impact their financial well-being. The report is based on a nationwide survey of more than 3,500 women and 1,200 men; and examines the progress women are making on their financial journeys and where they might need additional guidance and support.
Investing is a key barrier and top regret
Women are confident managing everyday financial tasks such as paying bills (92%) and managing a budget (87%), yet only half are confident managing investments (53%) and creating a diversified portfolio (44%).
While women and men have nearly equal influence on day-to-day financial decisions, such as paying bills (68% of women vs. 67% of men) and determining the household budget (63% vs. 63%), less than half of women feel they have influence when it comes to decisions on investments (46% vs. 64%). The top obstacles women say are holding them back from investing include not having savings to invest (38%), lack of knowledge (32%) and believing investing is too risky (22%).
When asked about their financial regrets, nearly half of women (44%) pointed to not saving and investing sooner. Women also say they would have invested more of their money (26%), educated themselves more around money (23%), not taken on as much credit card debt (21%), chosen a career with higher pay (19%), lived within their means (18%) and taken better care of their health (14%).
Other key findings include:
Younger women paving the way for open financial conversations. Younger women (ages 22-39) are more comfortable having financial conversations than their older counterparts (ages 65+), including talking with financial advisors (73% vs. 64%), applying for new or better positions at work (74% vs. 42%), discussing new investment opportunities (65% vs. 44%) and asking for a raise (59% vs. 38%).
Being debt free seen as the top indicator of financial independence. 47% of women listed being debt-free as the hallmark of financial independence. Other top indicators included being able to weather an unexpected expense (39%), being able to support myself without financial help from my family (34%) and being able to support my family (32%). Paying off debt also topped the list of barriers to improving financial wellness (36%), followed by high cost of living (34%) and not being paid enough (31%).
Women’s confidence levels vary for financial events during different life stages. A majority of women are confident about paying for future healthcare costs (56%) and staying comfortable in retirement (54%), but confidence levels drop as it pertains to buying a home (40%), funding children’s or grandkids’ education (38%) and taking care of aging parents (32%).
Financial planning varies by groups. While 82% of women have a financial plan, only 30% focused on plans of 10 years or more. Caucasian and Asian-American women are more likely to have long-term plans (35% and 37%, respectively) than Black (20%) or Hispanic (20%) women. Women who identify as LGBTQ+ are also less likely to have a long-term plan (21%).
Saving for retirement is top of mind, yet many don’t have an actionable plan. Saving for retirement topped the list of short-term (49%) and long-term (54%) goals, yet one-in-five women approaching retirement do not have a financial plan. In addition, 57% have not figured out how much to save for a comfortable retirement and 40% are not confident about staying comfortable in retirement.
Older women turn to Social Security to fund retirement, younger women plan to lean on savings. 90% of women 65+ plan to rely on Social Security in retirement (vs. 49% of women ages 22-39). Younger women ages 22-39 are more likely to plan on using personal savings (63%, vs. 53% of women 65+).
Women in the workforce face unique concerns, prioritizing salary increases over time off. About half (49%) of women left the workforce at some point, with the primary reason being caregiving (58%). While 36% returned to a lower-paying job, a majority of women (77%) do not regret their decision to spend time away from their career, and 71% say returning to their job was rewarding. In addition, when asked if they would prefer higher pay or additional time off, 61% said they would prefer a pay increase.
Women continue to look for reliable sources of advice to help them on their financial journeys. Though 35% say “a go-to trustworthy source for advice” would help make managing their finances easier and 44% see a financial advisor as a key financial resource, 55% have never worked with one. In addition, though reliance on financial advisors increased only slightly with age (41% of women ages 22-39 vs. 47% of women ages 65+), it increased significantly by income level (35% of women with less than $50k in income vs. 61% of women with more than $250k in income).
“At Bank of America, we’re committed to helping all women navigate the nuances of their financial journeys by providing the foundational education, professional advice and resources needed to build their confidence and take action to achieve financial security,” said Sabbia.
Bank of America’s Retirement & Personal Wealth Solutions organization serves more than 25,000 companies of all sizes and more than 5.8 million employees as of December 31, 20211. Bank of America offers institutional client employees a range of financial benefit programs to help them pursue their financial future, including our Financial Life Benefits® program. Financial Life Benefits offers a suite of workplace benefits and solutions designed to help meet the near- and long-term financial needs of employees. This complete offering brings together traditional financial benefits – including retirement plans 2, health savings 2, equity compensation 2 and non-qualified deferred compensation plans2 – with a range of banking and lending capabilities from Bank of America and investing capabilities from Merrill to help address employees’ financial needs more comprehensively.
Women, Money, Confidence: A Lifelong Relationship Methodology
Ipsos conducted a 21-minute online survey among a representative sample of more than 3,500 women and more than 1,200 men age 22+ in February 2022. Quotas were enforced to ensure results were representative within gender by age, race, income and assets, marital status, employment status, and education. Survey content was developed by Ipsos in consultation with the Bank of America team.
Source: Bank of America