Women apparently are tapping into their “financial superpowers” and are making smart money moves to gain ground in several financial areas, although there’s still more work to be done to help them feel better prepared, new research from Fidelity Investments suggests.
According to Fidelity’s study, the number of women saving for retirement is slowly but steadily on the rise and the gender gap is closing—with 68% of women and 77% of men saving for retirement in 2023, compared to 66% of women and 82% of men in 2019.
What’s more, 60% of women are actively investing in the stock market and taking a less reactive approach to recent market fluctuations than their male counterparts. To that end, the research shows that more than half (51%) of women who invest in the market say they typically stay the course on their investments when the market experiences a dip, compared to 43% of men.
Women are also taking proactive steps in deciding to invest. Notably, Fidelity says that it added 48% more new women customers in 2023 compared to 2019. Younger women led the way, as the firm added 99% more new Gen Z women customers and 48% more new Millennial women in the same period.
“Women hold incredible spending power, and it’s encouraging to see more and more taking control of their finances,” said Joanna Rotenberg, president of Personal Investing at Fidelity Investments. “The first step toward taking action is being aware of the factors that make women’s financial planning unique.”
Why Women Need to Plan Differently
But even though more women are saving for retirement, the percentage feeling knowledgeable about important financial topics—such as how to invest their savings to prepare for retirement (52%), when to start taking Social Security to get the highest benefit (59%), and how to pay for health care expenses in retirement (56%)—has stayed relatively flat since 2019.
Perhaps not surprisingly, the top five financial stressors women face today are largely tied to these factors, all of which impact women disproportionately compared to men:
- Thinking I should be doing more with my finances than I am (40%)
- Saving enough to retire (39%)
- Paying off debt (37%)
- Addressing the cost of health care in retirement (29%)
- Knowing how to invest my savings to reach my financial goals (24%)
To help reduce these stressors, Fidelity suggests that it’s important for women to consider the factors that can often make financial planning different for them, especially in the following three key areas.
Caregiving: While more women have been returning to the workforce after stepping away during the pandemic, women continue to shoulder most caregiving duties, which can impact their mental health, career trajectory, and savings potential. In fact, nearly 1 in 4 women caregivers (22%) currently report not saving as much for retirement due to caregiving responsibilities (including 24% of Millennial women and 28% of Gen X women). Women are also more likely to say they had to leave their job or retire early due to their caregiving duties, and 10% say they’re not able to invest outside of retirement.
Extended retirement years: On average, women live six years longer than men. As a result, their savings need to stretch to cover a longer retirement. In recent years, more women are feeling on track with their retirement savings since 2019—up 5%—while fewer men feel on track since 2019, down 12%.
Notably, Boomer women are feeling the most confident since 2019, up 39%, which Fidelity suggests is encouraging considering they are approaching their retirement years. Still, nearly 6 in 10 women overall do not think they’re on track with retirement savings—pointing to a lack of confidence in their financial plans.
Health care costs: Health care is another financial factor women need to plan for, given their longer lifespans. Fidelity’s study reveals a disconnect when it comes to how much it will cost to cover those expenses. Although women are estimated to need $165,000 on average for health care expenses in retirement, half of women (50%) respondents anticipate needing $150,000 or less—and 36% of women have no idea what they will likely need.
Encouragingly, Fidelity says its customer data shows women are taking advantage of savings vehicles like health savings accounts (HSAs), outpacing men in both account opens and asset growth over the past four years. Since 2019, HSAs opened by women have grown by 204%, compared to 172% by men, and asset growth among women has increased by 334%, compared to 309% for men.
Another positive is that more women continue to seek out financial guidance to help plan for these factors. Fidelity has seen a 19% increase in women reaching out for guidance since 2019, compared to a 16% increase among men.
The findings are based on an online survey conducted between July 21-26, 2023, by Big Village on behalf of Fidelity Investments, among a sample of 2,020 adults, including 994 men and 1,002 women.
