BMO survey: American women less confident in retiring compared to men

A special report from the BMO Real Financial Progress Index focusing on women and financial confidence found a stark contrast regarding how women and men feel about one of life's top financial goals: retirement.

A significantly lower number of women (53 percent) feel financially confident about retiring at their target age compared to 66 percent of men. In addition, nearly three quarters (74 percent) of women have no financial plan in place to reach their goals compared to 58 percent of men with no plan – the largest gender gap of any issue reported by respondents.

Among the women who are not confident in their retirement plans, saving more (31 percent) was reported as the top action they should take to retire as planned, followed by earning more (10 percent), investing (9 percent) and limiting spending (7 percent). Despite this, 74 percent of women said they feel in control of their finances, which was slightly lower than men (79%).

In the United States, according to the Bureau of Labor Statistics, on average, women earn 83 cents for every dollar earned by men, adding up to $10,435 a year or $417,400 at the end of an average career, affecting the amount of money the average woman can save and invest for retirement.¹ Adding to financial stress among women, BMO's survey found 86 percent reported having a fear of unknown expenses and 65 percent said keeping up with monthly bills causes them anxiety.

"It's no surprise that women, many of whom left the workforce during the pandemic to care for children or pull from savings to spend on childcare, are now feeling the added pressure to save and recoup what they may have been able to put aside for retirement," said Tina DeGustino, Director of Consumer Strategy, U.S. Personal & Business Banking, BMO.² "Real financial progress is made by implementing both short and long-term planning. At BMO, we ensure that we provide women the right tools and resources to take control of their futures and close the financial confidence, savings and action gaps that still exist today."

Financial literacy gender gap stems from childhood upbringing

BMO's survey also found a large gap between how women and men report being educated about personal finance from a young age. When asked about whether respondents received family support around financial literacy by having conversations around budgeting or financial planning, 57 percent of women said they did not receive support compared to 47 percent of male counterparts.

The report also found the following differences in which women report lagging men financially:

• Most women reported not having any financial plan in place (74 percent) compared to 58 percent of men
• More men work with financial advisors (38 percent) compared to women (28 percent)
• One in five (21 percent) women use free digital tools compared to 30 percent of men
• Only 12 percent of women rely on tools or resources from their banks compared to 20 percent of men

When asked about financial literacy, 79 percent of women said they would like additional help. Resources and tools to help save money was at the top of the list (53 percent), followed by retirement strategies (36 percent) and budgeting (28 percent).

"Despite the progress women have made the last several decades, our survey proves just how real the gender gap is in essentially every aspect of finances – from retirement savings to planning to financial literacy," said DeGustino. "With most reporting no financial plan in place, women can start to alleviate their anxiety now and take control of their finances by evaluating their budgets, adjusting spending habits accordingly, and strongly committing to a savings and retirement plan. Meeting with your banker regularly for check-ins will help you stay on track."

BMO outlines how women can take control of their finances

BMO, in collaboration with United Way, has developed a free financial literacy e-book that addresses key financial topics such as retirement planning, budgeting, debt and credit management, digital banking, homeownership, and loans. It is available for all Americans regardless of where they bank.

Additional tips include:

• Use free digital banking tools and apps to help track spending patterns and save.
• Link your checking and savings accounts to have a clear view of what you are spending and saving. No matter who manages finances in a relationship, be informed about incoming and outgoing money flow, and have regular discussions to ensure you are making the financial progress needed to achieve your short, mid, and long-term goals.
• Establish and build your own credit. Take advantage of credit building solutions such as a credit building loan or secure card and monitor your credit report score and activity often. Setting a up a savings goal and reoccurring savings transfers into an account, no matter the amount, provides a sense of progress and motivation to achieve your own savings goal.
• Make a budget or savings plan for large purchases like a car, vacation, or new appliance.
• When evaluating what you owe, pay down debt with the highest interest rate first.
• Assess ongoing expenses such as streaming services, cable and internet plans, gym memberships or phone providers and negotiate lower prices when possible or work to reduce or eliminate programs you don't use often.
• Speak with an expert to make sure your savings and payment patterns are on track to reach both near- and long-term goals and that you have the right financial tools in your toolbelt to achieve goals, such as buying a house or car, or improving your credit score.

To learn more about how BMO can help customers make financial progress, visit: https://www.bmo.com/en-us/main/personal/.

Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The index aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money.

The research detailed in this document was conducted by Ipsos in the United States from January 16 to February 12, 2023. A sample of n=3,401 adults ages 18+ in the US were collected. Quotas and weighting were used to ensure the sample's composition reflects that of the U.S. population according to census parameters.

Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $1.15 trillion as of January 31, 2023, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.