While men and women are saving similar percentages of their annual income, their perceptions about their investing acumen remains miles apart.
According to new research released today by HerMoney Media and Principal Financial Group, the gender gap is still very real in workplace financial wellness programs, with significant differences in overall perception and confidence about money management and investing between the sexes.
The 2023 State of Women survey from HerMoney, which included 900 full-time employees of small and midsize businesses with access to either health insurance or a retirement savings plan, found men and women are saving similar percentages of their annual household income and have relative amounts saved in personal emergency funds at equivalent rates. However, only 45% of women employees compared to 58% of men employees were confident about money management and only 22% of women considered themselves knowledgeable about investing compared to nearly half of men (46%).
Long game vs. short game
The survey found female employees are taking a longer-term approach than men when it comes to investing. The majority of women (55%) hold their investments in an economic downturn, compared to just 40% of men. Additionally, one-third of men (32%) rebalance their portfolio or sell shares during economic downturns compared to only 16% of women who rebalance or sell.
“The good news is that women are focused on precisely the right financial threats and aren’t allowing a volatile economy to derail them. In fact, when it comes to making investing decisions, women—who have long had a reputation for being risk-averse—seem to have turned an important corner in their investment decisions,” says Jean Chatzky, CEO of HerMoney.com.
When it comes to financial guidance, 59% of women reported not working with a financial professional (compared to 50% of men), even though 60% view them as the most trusted resources for making investment decisions. Compared to men, women are using a wider variety of resources to learn about investing through podcasts (44% vs. 27%), books (40% vs. 26%), and workplace programs (25% vs.15%).
“While employees’ needs are varied, almost everyone can benefit from more guidance, education, and support to build their financial acumen and confidence,” said Teresa Hassara, senior vice president of workplace savings and retirement solutions at Principal Financial Group. “We understand individuals have moments in life when they may not feel fully confident in making financial decisions. So we help employers become more intentional with the workplace solutions they offer—making available a balance of one-on-one, digital, and dedicated advisor interactions for their employees.”
The more personalized the experience, the more success individuals will have when it comes to achieving long-term financial security and retirement goals, Hassara added.
Financial wellness at work
The survey also focused on how workplace wellness programs are evolving to help employees build a stable financial foundation today and for the future. When comparing what employees are looking for from these programs—and how they’re using them—the results were uneven by gender.
“At the end of the day, companies offer financial wellness programs so their employees can feel just that—financially well. In this area of support, we still have a long way to go.”
Jean Chatzky
Women employees (40%) are more likely than men (32%) to say financial wellness feels like “being at peace (without financial stress).” And yet, significantly more men (28%) than women (18%) report a reduction in their own stress levels due to the financial wellness programs at their companies.
Additionally, when asked how various elements of the financial wellness programs offered by their employer are utilized, while both women and men reported awareness and use of resources available to them, men reported stronger results. Men, more than women, credit their employer’s financial wellness programs with helping them increase their emergency savings (25% vs 13%), reduce debt (21% vs 9%), and improve their setting of financial goals (23% vs 15%).
“While it’s heartening to see these programs are helping move the needle in the right direction, these survey results show an imbalance in value, which could be stunting the financial stability of women who need more support tackling the building blocks of personal finance,” Chatzky says. “At the end of the day, companies offer financial wellness programs so their employees can feel just that—financially well. In this area of support, we still have a long way to go.”
SEE ALSO:
• Employers Taking a More Proactive Approach to Financial Wellness
• 401(k) Gender Savings Gap Still Large, But Smaller for Younger Participants
• Principal Becomes 6th Recordkeeper to Join Portability Services Network
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.