Women have made some serious headway in the workforce in recent years, but the fact is that they still face financial challenges. Merrill Lynch recently researched those financial challenges in partnership with Age Wave, and the firm released a report of 3,707 respondents, including 2,638 women and 1,069 men, Women and Financial Wellness: Beyond the Bottom Line. The results suggest that 70 percent of women believe that men and women have a fundamentally different life journey — including financial concerns and opportunities.
"Women have come a long way both personally and professionally, but when it comes to their finances, there is still a trail left to blaze," Lorna Sabbia, head of Retirement and Personal Wealth Solutions for Bank of America Merrill Lynch, reportedly said, according to Business Wire. "As women are at a tipping point to achieve greater financial empowerment and independence, it is even more essential that we support women in helping them pursue financial security for life. This includes encouraging women to invest more of their assets, save earlier for retirement, and pursue financial solutions that closely align to their personal values and life paths."
Financial security for life is key, especially for women who, on average, live five years longer than men. In fact, 81 percent of centenarians are women and, while 64 percent of women say they would like to live to 100, few feel financially prepared — 44 percent of women said they worry they will run out of money by age 80. On top of that, the gender wealth gap (including earnings, investments, retirement savings and additional assets) means that women, at retirement age, may accumulate as much as $1,055,000 less than their male counterparts. This is largely because many women take time away from work to provide care for aging parents, spouses and their children — one in three mothers who returned to the workforce after caring for children said they took on less demanding work, which resulted in lower pay. And 21 percent said they were paid less for the same work they did previously. Plus, women face greater lifetime health and care costs; the average woman is likely to have higher health costs than the average man in retirement, paying an additional $195,000 on average due to living longer and having to rely on formal long-term care in later years.
Women tend to look at money as a way to finance the lives they want to live, and about two-thirds look to invest in what matters to them — 77 percent reported seeing money in terms of what it could do for themselves and their families. But, while women are confident in most financial tasks like paying bills (90 percent) and budgeting (84 percent), they don't have very much confidence when it comes to investing. Only 52 percent of women said they are confident in managing investments, versus 68 percent of men, and millennial women were the least confident at 46 percent.
They lack such confidence, in fact, that 61 percent of women said they would rather talk the details about their own death than talk about their money. But perhaps that's partly because 45 percent of women reported not having a financial role model.
For women who did invest, their financial confidence soared — 77 percent of women who invested said they felt like they will be able to accumulate enough money to support themselves throughout their entire lives.
"Women’s life journeys are not only different than men’s, they’re different than the life journeys of our mothers and grandmothers," Maddy Dychtwald, co-founder and senior vice president of Age Wave reportedly said, according to Business Wire. "We have more opportunities and choices when it comes to family, education and careers, but we’re so busy taking care of other people and other priorities, we often don’t take the time to invest in ourselves and our future financial wellness. If more women can actively take control of their financial future all along the way, it would not only benefit them, but also their families and our society overall."
The research suggests that women could use help addressing their top financial regret: not investing more. Forty-one percent of women said not investing more was their biggest regret, largely due to lack of knowledge (60 percent) and confidence (34 percent). And it's important to understand that women's financial security today is about more than closing gender pay gap; rather, there are disparities when it comes to wealth, not just income, and the focus should be on accumulating assets or wealth at all income levels, as well as increasing women’s access to wealth escalators such as paid time off and pretax savings opportunities.
"In a period of remarkable advances for women in society, a remaining frontier is financial well-being,” said Andy Sieg, head of Merrill Lynch Wealth Management, according to Business Wire. "It’s a basic component in the quality of life. This report lays out a blueprint for helping to achieve it — and we at Merrill Lynch relish the opportunity to provide women everywhere with advice and support that can make a meaningful difference at every stage of their lives."
AnnaMarie Houlis is a multimedia journalist and an adventure aficionado with a keen cultural curiosity and an affinity for solo travel. She's an editor by day and a travel blogger at HerReport.org by night.