Is it outliving their assets, maybe longevity overall? What issue worries women more than any other (at least now)?
Little surprise, inflation risk tops the list of women’s financial concerns (73%), ahead of illness or disability, market volatility, and even longevity and unemployment.
Yet only two in five women say they know how to protect themselves from it, according to HerMoney and the Alliance for Lifetime Income.
The organizations’ State of Women 2022 study finds that low levels of inflation preparedness were evident across all income levels. Even among the highest-earners—women with annual income above $200,000—only 44% know the right steps to take to address inflation risk in their portfolios.
“Inflation protection can be boiled down to a few key steps,” Jean Chatzky, HerMoney CEO and Alliance for Lifetime Income Fellow, said in a statement. “Prioritize paying off any high-interest rate debt. Delay taking Social Security to increase your monthly take. And maintain a diversified investment portfolio for growth while using annuities or pensions to cover your fixed costs in retirement. It’s also a good idea to keep an eye on where your money is going to keep a lid on unnecessary and impulse spending.”
Notably, only 12% of women consider themselves risk-averse regarding investments. And when compared to their parents, nearly two-thirds (62%) are bigger risk takers, while more than a third (35%) are bigger risk takers than their partners.
“Women embrace risk in the market but should also realize ways of protecting their future selves,” said Jean Statler, CEO of the Alliance for Lifetime Income. “Four in ten women (41%) agree with the statement that protecting their portfolios is more important to them than high returns. As women enter their highest-earning years and near retirement, it’s important that they consider adding sources of protected income to their portfolios to provide a guarantee.”
Interestingly, women are much more risk averse when it comes to their careers (32%) and their personal lives (30%) than their investments (12%). More than four in 10 (43%) say they take more risks with their money than with their life or work.
Many of the most common risks their “future selves” might regret not taking in 20 years are personal rather than financial. Saving more money for later (45%) is the only regret that cracks the top five, alongside a host of career and personal risks, including not traveling to places outside my comfort zone (57%), making new friends (43%), working less to spend more time with family (41%) and saying what you really think (37%).