“Women embrace risk in the market but should also realize ways of protecting their future selves,” Jean Statler, CEO of the Alliance for Lifetime Income.
Inflation risk 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, all per the latest chapter of HerMoney and the Alliance for Lifetime Income’s State of Women 2022 study.
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%).
- Yes, Even Higher-Earning Women Worry About Money
- Women Are Taking the Lead With Their Finances (And Retirement)
- 3 Out of 5 Women Have Money Stress. Here’s What to Do About It
- Less Than Half of Women Know How To Make Their Money Last In Retirement
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