Women are feeling less financially secure than men these days, despite an improving economy, a new Bankrate.com survey finds.
‘“It’s not an anomaly,” said Bankrate.com chief financial analyst Greg McBride. “This is a consistent reading, month-in, month-out.” While men feel that their financial circumstances improved over the past year, women view their financial security as having deteriorated slightly.
Bankrate creates its financial security index by measuring respondents’ sentiment in five categories: job security, comfort level with savings, comfort level with debt, net worth and overall financial situation. Women were less optimistic than men in all five categories, McBride said.
“I think it still stems from the fact that women feel less confident when it comes to their finances in general,” said Zaneilia A. Harris, president of Harris and Harris Wealth Management Group.
Although job losses and wage stagnation have hit both men and women, Harris argued that women were at a disadvantage in the recovery. High-paying fields such as technology tend to be male-dominated, she pointed out. “You still have us mainly focusing our skill sets in healthcare, in education, in nonprofit — and those positions aren’t going to pay us the salaries we need,” she said, adding that women are also less likely than men to negotiate higher salaries.
Research from the Sloan Center on Aging & Work at Boston College finds that women place a higher priority than men on their job security, but that they’re also less satisfied with their level of job security. Tay McNamara, co-director of research in secondary data studies, suggested via email that this combination could contribute towards women having a dimmer view of their overall financial security.
Women also have demographics working against them. “Women live longer, they’re more likely to be single parents [and] caring for aging parents... and women are more likely to be out of the workforce for a period of time in their life,” McBride said.
Other research has shown that female investors tend to be more risk-averse than their male counterparts, which could play a role. “Being risk-averse in investments is associated with a fairly large reduction in your assessment of your finances,” said Steve Sass, program director for the financial security project at the Sloan Center.
Since the research is ongoing, Sass said it’s still unclear how these two viewpoints affect each other, but they could contribute to women entering retirement with inadequate savings. “Risk aversion will almost guarantee that your nest egg won’t grow [as well],” he warned.
Since women have this additional burden, it’s important that they be especially proactive about securing their financial futures, McBride said. “All of that really adds an urgency to women of all ages to take full advantage of tax-favored retirement savings opportunities,” he said.