Women with investable assets of at least $100,000 are not only taking more proactive approaches to their finances than they were a year ago, but they’re also working with financial professionals to help them navigate the pandemic and prepare for future crises, according to results of a recent study from Nationwide.
Though the pandemic has pushed women investors to prepare for the future, they’re still rightly concerned about economic recessions and market volatility. After surveying nearly 2,500 investors and financial professionals to learn about the critical financial issues they faced because of the pandemic, Nationwide Retirement Institute’s seventh annual Advisor Authority study found that 70% of women investors are concerned about a U.S. economic recession in the next 12 months.
Additionally, more than half of women investors (56%) anticipate that market volatility will increase in the next 12 months. Women investors’ biggest financial concerns are protecting assets (31%), taxes (27%), and inflation (27%).
While the COVID-19 recession influenced many financial decisions that women made, the study showed they were more likely than men to remain level-headed about their investment decisions during a financial crisis. While women are often stereotyped as “emotionally driven,” fewer women investors (8%) withdrew funds from retirement savings plans such as 401(k)s, 403(b)s, and IRAs in response to crises compared to men (15%).
Women investors were also more optimistic about their financial outlook in 2021 (49%) compared to 2020 (32%).
The chaos and uncertainty of the past two years has led women investors to be more proactive about managing financial risk and planning for their futures. Per the study, 83% have a strategy to generate guaranteed retirement income. Meanwhile, 73% intend to take a more active approach to investing, while 72% have a plan to help protect from outliving their savings, and 59% have a strategy to help protect savings against market risk.
Increasingly, most women (64%) are making these money moves with support from financial professionals. Of those that do, 40% said working with a financial professional or advisor gives them more confidence in their financial future, especially during financial crises.
Although past studies showed that women were reluctant to seek professional advice due to competing priorities such as family and career obligations, that sentiment appears to be shifting. Women investors value their relationship with financial professionals, especially as they take control of their finances during pandemic-fueled uncertainty.
Because of the possibility of longer lives and longer retirements, many women are seeking protection from outliving their savings. The top solutions women investors have in place to help them financially through a long retirement are Social Security (64%), dividend-yielding stocks (36%), and a pension or other defined benefit plan (33%).
Additional findings from the Advisor Authority study can be found online.
Nationwide offers a variety of actively managed ETFs for advisors that cater to a range of investment exposures and strategies for those seeking retirement income options for their clients as part of their bigger retirement planning picture.
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