Women’s Paychecks Are Catching Up to Men’s, so Why Do They Still Feel Financially Vulnerable?
Written by
Yaël Bizouati-Kennedy
Edited by
Daria Uhlig
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Women are taking on more financial responsibility, and in turn, almost half of them consider themselves to be the chief financial officer of their household. Yet, when it comes to feeling financially secure, women feel more vulnerable than they did in the past, according to the 2023 Women Money Power Study from Allianz Life Insurance Company.
The new study found that 49% of women consider themselves to be the CFO of their household — up from 41% in 2021. And Gen X women make up the lion’s share of household CFOs, with 54% sharing this sentiment compared to only 51% of millennials and 41% of boomers.
One of the drivers of women’s increased economic power is the fact that an increasing number of them say they are the primary breadwinner in their family — 43%, up from 34% in 2021.
And in terms of generations, more than half of millennial women (51%) say they are the primary breadwinner in their family, compared to 39% of Gen Xers and 37% of boomers, the study found.
Yet, the discrepancy between these findings and the fact that women are feeling less secure financially than they did in the past is striking. Indeed, the study found that just 64% of women say they feel secure, down from 72% in 2021.
So, what is keeping women up at night and affecting their feelings of financial security?
“Running out of money in retirement, rising costs of health insurance and loss of a significant other,” said Heidi Vanderkloot, head of FMO distribution, Allianz Life Insurance.
Indeed, many women are uneasy about their plans for retirement — just 52% of women say they are confident about their current retirement plans. Divorced women are the most nervous — just 38% say they feel confident about their current retirement plans.
How Can Women Feel Less Vulnerable?
According to Allianz’s Vanderkloot, the simple act of creating a financial plan can help ease worries.
“If you have documented where you are financially and where you are headed, it can help you feel more confident moving forward,” she said.
In addition, having a strong retirement plan in place will address risks that could cause a retiree to spend their savings faster than anticipated due to factors such as inflation and market downturns, she added.
Strategies that help mitigate risks will also increase a retiree’s confidence.
“For example, an annuity can offer lifetime income benefits, diversify a financial portfolio and help improve retirement outcomes,” she said.
That written plan can also help ease concerns about rising costs of health insurance and the loss of a significant other.
As Vanderkloot explained, a retirement plan should acknowledge that healthcare needs will likely increase with age and outline how those costs will be managed.
“That plan may include contributing to a health savings account while working to save for future healthcare costs in an account that grows tax-deferred,” she said, adding that for couples, establishing a financial plan for what to do when one spouse passes can help them feel prepared.
“That plan will address how to handle Social Security benefits, tax implications and other financial factors,” she added. “In the end, having a written financial plan created with the help of a financial professional can help women feel prepared for their financial futures.”
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