Inflation Risk is the Top Financial Concern for Nearly Three in Four Women
Almost nine out of 10 women are more worried about the risk of running out of money than the risk of not enjoying their money right now.
WASHINGTON, August 3, 2022 — The latest chapter of HerMoney and the Alliance for Lifetime Income’s State of Women 2022 study finds that inflation risk (73%) tops the list of women’s financial concerns, ahead of illness or disability (71%), market volatility (70%), longevity (58%) and unemployment (43%). Yet only two in five women (41%) say they know how to protect themselves from inflation risk.
The study looked closely at women’s relationship with various financial risks in their lives and their investment portfolios. 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 percent know the steps to take to address inflation risk in their portfolios.
“Inflation protection can be boiled down to a few key steps,” says Jean Chatzky, HerMoney CEO and Alliance for Lifetime Income Fellow. “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 percent of women consider themselves to be risk averse when it comes to 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 ten (43%) say they take more risks with their money than 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%).
About the State of Women in 2022
This online study was conducted from June 14 to July 11, 2022, among over 1,100 women who are members of the HerMoney community. They range in age from 18 to 75, most are college-educated and employed full-time. Nearly two-thirds are married or partnered.
About the Alliance for Lifetime Income
The Alliance for Lifetime Income is a non-profit 501(c)(6) educational organization based in Washington, D.C., that creates awareness and educates Americans about the value and importance of having protected lifetime income in retirement. Our vision is for a country where no American has to face the prospect of running out of money in retirement. The Alliance provides consumers and financial advisors with educational resources, interactive tools, and actionable research and insights to use in building retirement income strategies and plans. We believe focusing attention and conversations on retirement income that lasts throughout life leads to greater retirement security for millions of Americans. Learn more at www.ProtectedIncome.org.
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Learn more about the Chapter 4 findings here: Chapter 4 Research Findings