Merrill Lynch recently released the results of a comprehensive survey on women and financial wellness, with some surprising observations.1 The top financial regret for the women surveyed was that they weren’t investing more—and with women living, on average, longer than men2, accumulating less in retirement income may have a major impact.
Below, we’ll discuss some of the biggest financial regrets for women (as outlined by this study), as well as a few things that women may be able to do to avoid suffering financial regrets.
A whopping four in 10 women surveyed reported that they’re concerned they aren’t investing more. Six in 10 women said they weren’t happy with their ability to invest in pursuing their financial goals (or the outcomes they were seeing); another six in 10 women identified their lack of investing knowledge as a hurdle to more confident investing.
These responses differ significantly from those from women who have amassed some investments; of this group, 77% of respondents felt confident that they’d be able to afford to retire.
Another major regret among women is a limited earning capacity or low-paid career. During the COVID-19 pandemic, two million women left the workforce; some for good.2 Returning to a job at one’s old salary may be a challenge after a break from the job market. What’s more, if you don’t have at least 35 years of reported earnings on your Social Security statement when you retire, your Social Security benefit may be lower than it would be otherwise.3
Even after reopening, inflexible or low-paying careers may hamper women’s ability to keep the lights on. With many employers struggling to find enough workers, this may be a good time to consider negotiating for a higher salary.
About a third of the women surveyed reported that they regretted living beyond their means. In most cases, these lifestyle extras are financed by a credit card or another form of high-interest debt. This overspending may include both luxuries and necessities; some women may go into debt for a new piece of jewelry or expensive vacation, while others might run up their credit cards by paying for pricey home or auto repairs. In any event, paying off high-interest debt may sometimes take years and cost hundreds or even thousands of dollars in interest.
Certain regrets, like overspending or not investing enough, may be possible to work through with some diligent behavior. Reading about investment strategies and subscribing to investment-themed periodicals may give you a broader financial framework, providing you the opportunity to make more informed investment decisions going forward. Working with a professional licensed to provide financial advice can potentially provide a better route to making such decisions.
However, women may have a greater challenge when it comes to increasing their pay. In some cases, this may require leaving your current employer and finding a higher-paying job elsewhere. While this type of change may be challenging and even uncomfortable, it may be one of the best ways to work towards increasing your salary.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.
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1 https://www.bofaml.com/content/dam/boamlimages/documents/articles/ID18_0244/ml_womens_study.pdf
2 https://www.sciencedaily.com/releases/2020/03/200324131821.htm
3 https://www.goodmorningamerica.com/living/story/million-women-left-workforce-2020-matters-74752515
4 https://www.ssa.gov/pubs/EN-05-10070.pdf
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