Women are not taking an equal role to men in planning their financial futures, and research shows it often comes back to haunt them down the road.
According to a recent UBS report, the traditional “divide and conquer” approach to managing finances, where married women typically handle day-to-day expenses while long-term planning is left to husbands, is leaving women ill-prepared to manage key financial needs during critical moments in their lives, such as divorce or the death of their partner.
Women are all too often left bearing responsibility for the consequences of financial and retirement planning decisions they did not make. According to the report, 74% of divorcees and widows discovered negative financial surprises when they were forced to take control, and most agree they would advise other women to take an active role in their finances now.
“Our study found that women generally overestimate the skills required to be financially prepared and underestimate their own capabilities,” said Theresa Bursey, Assistant Market Head for UBS’s Florida Gulf Coast region. “However, research shows that women are actually better long-term investors than men are. Among the 19% of women who share the responsibility of long-term financial planning with their spouse, more than 90% have higher confidence in their financial future, make fewer mistakes related to financial planning, and feel less stressed about money.”
Key findings
- Women are acutely aware of their long-term financial needs: The top three financial needs identified by the majority of women globally include retirement planning (76%), long-term care (72%), and insurance (68%)
- Yet few take the lead in managing their own long-term finances: Only 23% of women globally take charge of long-term financial planning decisions
- Women continue to defer to their spouses for important financial decisions: More than half of women globally (58%) defer to their spouse to manage critical, long-term decisions for reasons ranging from “my spouse never encouraged me” to “my spouse knows more” about the topic
- Millennial women are even more likely to let men lead: Surprisingly, Millennial women in the U.S. are even less likely to take charge, with 56% of women age 20-34 deferring to their spouse, as opposed to 54% of women over 51 years of age
- This behavior can put women at risk financially during critical life moments: This lack of participation stands in contrast to the urgent calls of U.S. widows and divorcees (98%) to push greater financial involvement, and the clear benefits for women who do partner with their spouses such as increased confidence and lower stress levels
“As women around the world live longer, the likelihood of becoming widowed or divorced increases. It’s critically important that women not only understand, but are engaged in key, long-term financial decisions,” says Jane Schwartzberg, Head of Strategic Client Segments at UBS Global Wealth Management. “Couples must recognize that sharing responsibility across all money decisions actually yields a dramatically better and more sustainable outcome than each partner handling one aspect alone.”
Explore more insights and read the full report: ubs.com/investorwatch
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.