A woman smiles and stares ahead confidently

Improving the financial confidence of women

May 3, 2022
Empower Insights

Why women feel less financially confident than men and how to bridge the gap

How people feel about their financial health — their financial confidence, per se — is heavily determined by perceptions of their own financial situation, including their personal debt, income and savings. People with a high level of financial confidence often feel as though they have control over their money and are in a strong position to reach their financial goals.

Turns out, men and women have different levels of confidence when it comes to money. According to our latest Wealth & Wellness Index research, women report a dramatically lower sense of financial confidence than men.1

Infographic - Chart men vs. women

But why is there such a discrepancy between the financial confidence of men and women? The reasons vary.

  1. Women are more stressed and less optimistic about their finances.

Financial confidence is just like self-confidence because it’s linked to how you feel about yourself or your situation. Our research shows women are more likely than men to have negative feelings related to their finances.

Infographic - chart - Stressed vs. Optimistic

Why the high stress and low optimism? Many factors can play a role, but according to our research, it boils down to managing debt and being prepared for the unexpected. Only 45% of women consider their debt manageable, and less than half say they could handle a major unforeseen expense of $500 or more without worrying too much about it.1  

  1. Women are more likely to downplay their financial well-being.

Far too often, women consistently rate themselves as less financially healthy than they actually are.

Infographic - chart - Thriving vs. Surviving

Surprisingly, only 11% of women reported their financial well-being as “thriving” – a state characterized by increased freedom and reduced stress when it comes to money. However, based on their actual Financial Wellness Score, a calculation based on more than 15 distinct questions, almost a third (30%) of women are actually “thriving.”1

In fact, 89% of the women we surveyed self-rated as either “stable” – they can meet planned and unplanned expenses as needed – or “surviving” – they can cover basic living expenses.

  1. Women have lower account balances.

Although women are on average saving at nearly the same rate as men (8% vs. 8.5%), their retirement account balances are significantly lower.2

Infographic - chart - Retirement account balances

It’s worth noting that women from higher income groups (>$60,000) save at a slightly higher rate than men. However, only about one in three savings plan participants earning more than $90,000 are women.2 These lagging income levels are likely contributing to the significant difference in retirement savings account balances.

The above data shows a clear opportunity to help women improve their overall financial health. Setting realistic goals and putting a plan in place can be an important first step to addressing financial challenges. Here are five ways to get started:

  1. Take control of your debt.

Debt can be a significant obstacle when achieving financial confidence. Making a realistic repayment plan to tackle credit card and student loan debt can help you get started on the path to improving your financial situation.

  1. Revisit your salary.  

There’s no getting around it — the gender wage gap persists. According to 2020 data from the Bureau of Labor Statistics, women earn 82 cents for every dollar a man earns. Negotiating your salary and career advancement is an essential part of advocating for yourself — and securing your future.

  1. Build your emergency savings.

Even a small emergency fund could keep you from sliding into debt if you get hit with an unforeseen expense. Learn how much you need in an emergency fund and start building an extra stash today.

  1. Create a financial plan.

Having a plan in place is an important step in addressing your short- and long-term financial challenges because it creates a road map to address your goals. It can help reduce stress and anxiety, too. Start drafting your plan with our financial goals worksheet.

  1. Seek out advice.

Whether you want to get a better understanding of how your retirement savings plan works or get help with managing your money, a financial professional can help you reach your goals.

1 Empower, Wealth and Wellness Index data, November 2021.

Methodology: Data and insights included in this article are primarily derived from the Wealth and Wellness Index Survey conducted by The Harris Poll on behalf of Empower and Personal Capital. The survey was conducted in the fourth quarter of 2021 and included 2,006 U.S. citizens ages 18 and older. Additional research and surveys used in this study are sourced as they appear.

2 Empower recordkeeping platform data as of 12/31/2021.

Empower Retirement refers to the products and services offered by Great-West Life & Annuity Insurance Company and its subsidiaries, including Empower Retirement, LLC.

This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.

Personal Capital is an affiliate of Empower Retirement.

The charts, graphs and screen prints shown are for ILLUSTRATIVE PURPOSES ONLY.

The research, views and opinions contained in these materials are intended to be educational; may not be suitable for all investors; and are not tax, legal, accounting or investment advice.

Securities, when presented, are offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.

“EMPOWER” and all associated logos and product names are trademarks of Great-West Life & Annuity Insurance Company.

©2022 Empower Retirement, LLC. All rights reserved. 1755044

RO2121429-0422

Latest Empower Insights

A husband, wife and baby work on financial plans on laptop computer.
May 17, 2022
Empower Insights

What is a beneficiary?

Ensure your beneficiary designations continue to reflect your wishes by reviewing them at least annually.

Carefully consider the investment option’s objectives, risks, fees and expenses. Contact Empower Retirement for a prospectus, summary prospectus for SEC-registered products or disclosure document for unregistered products, if available, containing this information. Read each carefully before investing.

Securities, when presented, are offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.

IMPORTANT: The projections, or other information generated on the website by the investment analysis tool regarding the likelihood of various investment outcomes, are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. The results may vary with each use and over time.

Investing involves risk, including possible loss of principal.

Insurance products are issued by or offered through Great-West Life & Annuity Insurance Company, Corporate Headquarters: Greenwood Village, CO; or in New York, by Great-West Life & Annuity Insurance Company of New York, Home Office: New York, NY. Guarantees are subject to the terms and conditions of the contract and the claims-paying ability of the insurer.

The managed account service is part of the Empower Retirement Advisory Services suite of services offered by Advised Assets Group, LLC, a registered investment adviser.

The Empower Institute is a research group within Empower Retirement, LLC.

“EMPOWER” and all associated logos and product names are trademarks of Great-West Life & Annuity Insurance Company.

All features may not currently be available and are subject to change without notice. ©2022 Empower Retirement, LLC. All rights reserved.

Unless otherwise noted: Not a Deposit | Not FDIC Insured | Not Bank Guaranteed | Funds May Lose Value | Not Insured by Any Federal Government Agency.