Fidelity has added 48% more female clients in 2023 than in 2019, according to a new survey.
This new “power surge” for women investors, as the $11.7 trillion financial giant described it, included an uptick of 99% more Gen Z women and 48% more millennial women clients.
“Women hold incredible spending power, and it’s encouraging to see more and more taking control of their finances,” said Joanna Rotenberg, president of personal investing at Fidelity Investments.
Women have also begun to close the concerning retirement savings gender gap, the company said. Today, 68% of women are saving for retirement, in contrast to 77% of men. That’s up for from 66% for women and actually down from 82% for men in 2019, Fidelity reported.
Women are also tapping into what Fidelity calls their “superpowers” more and making gains, including actively investing in the stock market (60%) and taking a less reactive approach to market fluctuations, by staying invested—which 51% of women investors do, compared with 43% of men investors.
But while women have made considerable progress, the percentage who are knowledgeable about important financial topics like how to invest their savings to prepare for retirement (52%), when to start taking Social Security to get the highest benefit (59%), and how to pay for health care expenses in retirement (56%) has remained “relatively flat” since 2019, the firm reported.
That’s where financial advisors come in. Some 40% of women think they should be doing more with their finances than they are; 39% believe they’re saving enough to retire, 29% of are confident about tackling the cost of healthcare in retirement and 24% say they know how to invest their savings to reach their financial goals.
“The first step toward taking action is being aware of the factors that make women’s financial planning unique, Rotenberg said.
Financial stressors that impact women to a much greater extent than men include caregiving, time off from work, longer lifespans and higher healthcare costs, Fidelity said. To help reduce these stressors and make the most of their money, Fidelity said, it’s important for advisors and women investors to consider the factors that can often make financial planning different for them, especially in these three key areas:
• Caregiving: “While more women have been returning to the workforce after stepping away during the pandemic, women continue to shoulder the majority of caregiving duties, which can impact their mental health, career trajectory, and savings potential. In fact, almost one-in-four women caregivers (22%) currently report not saving as much for retirement due to caregiving responsibilities (including 24% of millennial women and 28% of Gen X women),” Fidelity noted.
• Longer lives in retirement: Women live six years longer than men, on average, so they need to create a retirement nestegg that will endure.
“Boomer women are feeling the most confident since 2019, up 39%, which is encouraging considering they are approaching their retirement years. There’s still more work to be done despite this progress, as nearly 6-in-10 women overall still don’t think they’re on track with retirement savings, pointing to a lack of confidence in their financial plans,” Fidelity said.
• Healthcare costs: Fidelity’s survey reports a disconnect between what women think they’ll need and what they’re actually projected to need to cover healthcare costs.
Although women are estimated to need $165,000 on average for healthcare expenses during retirement, 50% of women anticipate needing $150,000 or less—and 36% of women have no idea what they’d need, Fidelty said.
“Encouragingly, women are taking greater advantage of savings vehicles like health savings accounts (HSAs), outpacing men in both account opens and asset growth over the past four years,” Fidelity reported.
In fact, HSA accounts opened by women have grown by 204%, compared with 172% for men, and asset growth among women has increased by 334%, compared with 309% for men, the firm reported.
“Women are on a strong economic trajectory and are increasingly looking for more opportunities and help, to make the most of their money,” said Lorna Kapusta, head of women and engagement at Fidelity.
