Women Taking Greater Control of Our Finances
Women are more aware, engaged and actively involved in financial matters than ever before, according to the latest in a series of studies on women’s financial behaviors conducted by Prudential Financial, Inc. (NYSE:PRU) and announced in partnership with the Women’s Media Center and The Paley Center for Media.
The 10th anniversary study, “Financial Experience & Behaviors Among Women,” revealed that 95 percent of women are involved in household financial decisions, with one-fourth acting as primary decision-makers. At the same time, however, two-thirds of women – 64 percent – say they have more work to do to secure their financial future.
“It’s clear that the more women know about money and finance, the more they understand what it’s going to take to meet their future financial needs,” said Christine Marcks, president of Prudential Retirement, a leading provider of 401(k) and other retirement plans. “But it’s disturbing that too few have plans in place to achieve their long-term financial and retirement goals.” The survey found just one-third of women have a detailed financial plan in place, and, among the youngest segment, (ages 25-34) just one in 10 has a financial plan in place. Women cite barriers to developing a detailed financial plan, including lack of time, the pull to meet shorter-term financial obligations, lack of knowledge and, for many, an unmet desire for assistance and help.
Despite the financial setbacks of the economic crisis and concern about continued volatility, more than half of the women surveyed remain optimistic about the country’s economic recovery, although more than 75 percent now plan to either work longer (56 percent) or wonder if they will be able to retire on time (20 percent).
The Prudential study involved a national sample of women who are sole or joint heads of households between the ages of 25 and 64. The group has household income of $50,000 or more. Nearly 60 percent are employed, nearly 75 percent have advanced degrees and half have financial assets of more than $100,000.
Although women are more involved in decision making, many still lack confidence in their ability to make sound financial decisions and lack knowledge about sophisticated financial products—a consistent trend over the course of the 10-year study. “Women’s understanding of basic financial products is strong,” said Lori High, president of Prudential’s Group Insurance business, the second-largest provider of corporate life and disability insurance plans. “Their knowledge of products such as annuities and long-term care insurance has deepened since we conducted our first research in 2000, but it continues to be limited.”
Underscoring this knowledge gap, fewer than two in 10 women feel “very prepared” to make wise financial decisions. Half indicate that they “need some help,” and one-third believe that they “need a lot of help.” Nearly nine in 10 of those who are looking for a lot of help need guidance on how to choose financial products that meet their needs.
“While the need for a trusted financial partner has never been greater, women are relying on informal personal networks for advice,” said Judy Rice, president of Prudential Investments, Prudential’s proprietary mutual fund business. “Building a financial plan requires expert assistance, so it is important that financial firms work hard to build trust and do a better job of encouraging women to find the time to establish realistic plans to meet their specific needs.”
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