Why Single Women are So Worried About Retirement

It's holding them back from taking necessary action

401k, women, retirement, savingIt's a problem.

Single women are less likely to consider themselves knowledgeable than other demographic groups when it comes to saving for retirement, creating a financial plan and investing.

Indeed, Fidelity finds that this perception may be holding some women back from taking the necessary steps to secure their desired financial future, despite the fact that they like having sole control of their finances.

While most single women associate their finances with positive sentiments like security, peace of mind and being in control, they also see their finances as a cause for stress and worry, more so than their male counterparts.

Overall, one-in-three say they are concerned about their finances, compared to just one-in-five single men.

Their top financial worries are affordable and comfortable living in retirement (33 percent of women, 25 percent of men), paying down debt and still saving for the future (31 percent, 24 percent) and being able to pay bills if faced with a job loss (31 percent, 25 percent).

“Women have more financial earning and decision-making power today than ever before,” Kathleen Murphy, president of personal investing at Fidelity, said in a statement. “And yet, too many limit the benefits of that power by shying away from taking control of their financial futures. As more women are staying single, and others are taking on sole financial responsibility through divorce or outliving a spouse, it’s critical that women be actively involved and invested in the financial choices that can enable them to live the lives they deserve.”

While single women may be thinking about their long-term goals and the financial challenges they may face along the way, most still aren’t preparing to meet these challenges by taking steps to curb their spending, reduce their debt, and prepare for a job loss.

In fact, when it comes to day-to-day budgeting, nearly half admit they tend to spend without thinking about the long term.

Furthermore, single women are the least likely demographic (28 percent) to have a comprehensive financial plan in place to help them set savings goals and navigate paying down debt.

And, while they worry about unexpected financial hurdles, nearly half have not put an emergency fund in place to cover three-to-six months of essential expenses.

Single women are also less likely not to have other long-term financial protections in place that can be critical in times of necessity. Across the board, women who have never married are the least likely to have a number of key safeguards in place, compared to those who have had a partner at some point.

Nonetheless, many in this group want to become better prepared, with more than half of singles either saying they need to spend more time on their finances or admitting they don’t spend any time managing their finances at all.

Divorced Women Feel More Financially Free, in Control

Major life events can often be a catalyst for action with finances. Among divorced women, the overwhelming majority said they feel more in control of their finances now that they’re divorced and have more financial freedom than when they were married.

Two-thirds feel they are in better financial shape today, although nearly half report they have had to cut back their spending to save more post-divorce. One quarter either applied for or started a new job, while 18 percent improved their earnings prospects by working toward a new educational degree.

For some, feeling more financially secure came immediately. For others, this takes time: one-third of those who have gone through a divorce said that it took more than a year to feel financially grounded; roughly one-quarter report that it’s been more than a year and they still don’t feel secure.

Perhaps the most surprising finding from this group is that only five percent of women reached out to a financial professional for guidance as they were going through their divorce.

“Going through a divorce is as much a financial and emotional experience as it is a legal one,” added Taussig. “Building a support team that includes mental health, legal, and financial professionals can help provide a more holistic view and a better start to the next phase in life.”

When asked what financial choices they would have made differently in their marriage, divorced singles said they wish they had saved more and better educated themselves about how to invest for the long term.

After Losing a Spouse, Widows Share Wisdom

Widowed women are more likely than any other group surveyed to say they feel confident about their finances and in control of their money.

More than half of widowed women say their spending and saving habits are excellent and they have a budget that keeps them on track.

They also feel more knowledgeable when it comes to financial topics like setting a budget, paying down debt, creating a will, and saving for retirement.

What’s more, while more than half of widowed women feel the same level of control over their finances as before they lost their spouse, nearly 40 percent feel more in control of their money now.

This positive financial outlook may be connected to early planning. Nearly two-thirds of widows say they had a financial plan in place prior to losing their spouse, and eight-in-ten of those women worked together with their spouse to build that plan.

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