These 'CFOs' have anxiety about retirement

By Jessica Hall

Women are comfortable with day-to-day household finances but shy away from investing and planning for the future, study finds

Women may be the chief financial officers of their households and responsible for 85% of household spending decisions, according to Nielsen, but they are far less involved when it comes to investing - and as a result, they worry about their retirement and long-term care needs.

Less than half of women (42%) exercise sole responsibility for investments in their households, and only a quarter (26%) share that responsibility with a partner. And according to new research from Edward Jones, women have anxiety about their long-term financial health.

"They may think about near-term savings needs like paying bills or juggling child-care costs, but they're forgoing long-term thinking," said Mona Mahajan, a principal and senior investment strategist at Edward Jones.

That puts women - who already face financial headwinds that include earning less than men, taking time out of the workforce because of caregiving responsibilities, and living longer - at an additional disadvantage.

Nearly half (48%) of American women in the "sandwich generation" - whose who are caring both for children and for parents or other older relatives - report feeling under financial strain, Edward Jones found. Half of women investors also worry about who will care for them as they get older, the research found.

Almost two-thirds of women (64%) in the sandwich generation report that caregiving duties have negatively affected their ability to save for their financial goals. More than half (57%) have had to take on fewer professional responsibilities due to caregiving responsibilities, resulting in a loss of potential income, Edward Jones found.

Women cited the many demands they juggle daily as the reason for not stepping into an "investment manager" role, with nearly two-thirds saying that if they had more time and fewer caregiving responsibilities, they'd be more confident in planning for their financial future, the research found.

Susan Hirshman, director of wealth management for Schwab Wealth Advisory and the Schwab Center for Financial Research, ascribed the problem to issues of time, temperament and training.

"Time is one of the issues. Women are so involved in the now and juggling everything that they don't think about the long term as much. ... A lot of women say they don't know what they're going to make for dinner. How can they plan for the long term?" Hirshman said.

"We don't do a good job in high schools or universities in training anyone. We need personal-finance classes to be a requirement," she added.

"When women are working, they get involved with their own finances, their own 401(k), but when they're not working - if they leave the workforce and they're a stay-at-home caregiver - emotionally they separate from investing and see the family money as their partner's money," she said. "But it's both of your money."

Be in the room

To take more control of your financial future, sometimes the first step is participation.

"One thing I've noticed is that we often talk with the men or meet with the men, at least in husband-and-wife couples. Women would benefit from being in the room. Participate," said Jessica Cherness, a financial adviser at Signature Estate and Investment Advisors.

Karen McIntyre, a senior financial adviser with Wescott Financial Advisory Group, urges women to have regular family meetings with their partner so that both spouses are involved in both short- and long-term financial issues affecting the household.

"We aren't trained to have financial conversations without emotion. Money is an emotional subject. Having regularly occurring family meetings is a way for both spouses to be in the know and have a platform to get everything out," McIntyre said.

Talking with a financial adviser can also help by bringing in a neutral person to serve as a sounding board and information source, McIntyre said.

"You're removing the perceived imbalance of power and getting a platform to ask questions," McIntyre said. "We are smart, capable women, but we do have that tendency to defer to our spouse in these areas surrounding net worth and investing conversations."

For women who are single, it's even more important to take control of your financial future and start saving as early as possible for retirement.

Educate yourself

McIntyre said women should seek out plain-spoken financial websites that can answer questions about retirement-plan options and investing strategies.

"People have to be motivated to make a change. Women - and all people - aren't going to do anything until they're forced to. But don't wait until there's a crisis to learn. Learn and take action before it becomes unwieldy," McIntyre said.

The worst thing you can do is nothing.

"Personal finance is just one of those places that you can ignore until one day it may rear its ugly head - like your health - and you'll have to face it," Hirshman said. "Doing nothing is a decision. If you have decided not to do anything, you have made a decision to put your family and yourself at risk."

-Jessica Hall

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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10-03-24 1502ET

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