Fidelity® Research Shows More Women Assuming Role as Family CFO, But Gap Remains for Many Couples in Sharing Responsibility for Management of Family Finances

Women Remain Less Confident than Men about Investing and Retirement Decisions;
Surprisingly, Younger Generations Most Passive

BOSTON – First, the good news: according to Fidelity Investments®’ fourth “Couples Retirement Study,” women are making progress when it comes to greater engagement in the family finances beyond simply budgeting for daily household expenses. In fact, the number of women claiming primary responsibility for day-to-day financial decisions jumped to 24 percent in this year’s survey (up from 15 percent in 2011) and those claiming primary status for long-term retirement decisions more than doubled to 19 percent from 9 percent in 2011.

However, the findings also reveal many women are still less confident when it comes to investing, and routinely defer to their partners on important financial decisions. While couples overwhelmingly believe they are in agreement about finances—nine in 10 couples (92 percent) agree they communicate well and eight in 10 (81 percent) describe themselves as “one financial entity”—when asked to assess their confidence level in taking full financial responsibility of retirement decisions from a spouse if necessary, many women are more confident in their partners’ ability than their own. The men in their lives agree: according to the survey, men are more likely than women to be very confident in their own ability (53 percent vs. 45 percent of women). Women, in turn, are more likely to be confident their “other half” could assume this role (52 percent vs. 43 percent of men). Surprisingly, younger women tend to be the most deferential of all.

”Women are giving so much of themselves at work, with their families, and in the community, but it’s just as important to take the time and ensure all that hard work is protected financially,” said Kathleen Murphy, president of Personal Investing at Fidelity. “While a lot of progress has been made, it’s critical for women to empower themselves by becoming equal partners managing the family finances and in long-term financial planning conversations.”

According to Fidelity research, the average American can expect to spend about 30 years or more in retirement. For a 65-year-old couple today, there’s a 50 percent chance one will live to the age of 92 and a 25 percent chance one will live to the age of 97. Compounding this prospect of a lengthy retirement is the fact that the average female can expect to outlive the man in her life by almost five yearsi. When one factors in a greater than 50 percent divorce rateii, the likelihood many women will at some point need to assume sole responsibility for their finances is significant. “This prospect underscores the importance of both partners making sure they are equally prepared to make life’s tough decisions should they ever have to go it alone; particularly women, who have a greater life expectancy,” said Murphy.

Women Make More than Ever, Yet Still Think Men Are “Better With Numbers”
Why aren’t women as engaged as they should be about finances? According to the survey, working women reported earning average salaries of $77,000 a year. Despite their advancements in the workplace and increasing income levels, it’s not always translating into greater engagement, and lack of confidence may be a contributing factor. For example, the study showed that among couples who work with an advisor, when asked why their partner is the primary contact, women are likely to say because they trusted their partner and perceived him as being “better with numbers.” Other factors might include that couples are dividing household tasks based upon perceived strengths or interests, or perhaps repeating behaviors and habits they observed in their own parents.

Ironically, research shows that women are often more disciplined investors and tend to stay the course once a financial plan is crafted. They also tend to be more consistent, conservative, and risk-averse investors. For example, the women in this year’s survey are much less likely than the men to be willing to invest a substantial portion of money to achieve potentially higher returns, even if it means possibly losing some or all of initial investment (4 percent vs. 15 percent of men).

Younger Women Need to be More Involved When It Comes to Finances
The 2013 Couples Retirement Study also examines the behaviors of Gen X (born 1967-1978) and Gen Y (born 1979–1988) couples. Surprisingly, even though more than three-quarters of these younger women are working, they appear to be playing a more passive role than older women:

• While one in four Boomer (born 1946-66) women (24 percent) identify themselves as the primary decision maker for day-to-day financial decisions, only 12 percent of Gen Y women feel the same way.

• Only 45 percent of Gen Y women say they are a joint decision maker when it comes to retirement savings decisions, compared to 58 percent of Boomer and Gen X women.

“The stakes are higher than ever, with people living longer and lingering questions about the sustainability of such things as social security and pensions, as well as the rising cost of healthcare and college,” said Murphy. “People are working way too hard not to make the most of their money and build a secure future. Just as you plan for things annually, such as taxes and vacation, it’s important to make financial planning a regular part of your conversations as a couple.”

Back to Basics: Learn ‘The Three Cs’
To make sure both partners are equally comfortable behind the financial wheel, Fidelity recommends couples consider the ”three Cs” to help them engage and align on a financial plan:

Communicate: Make it a point to set aside time to have meaningful conversations and identify shared financial goals. If extra help or guidance is required, a financial professional can often help sort through the important points to consider and facilitate agreement.

Collaborate on a plan: Building a financial plan together gives each partner an equal opportunity to understand their financial needs and how to get there. Planning allows couples greater control over how they can reach shared financial goals and helps identify potential hurdles and sacrifices.

Control leads to greater confidence: Having a plan—and sticking to it—leads to greater confidence for both partners, which brings greater peace of mind that a solid roadmap is in place to achieve your goals and dreams. Fidelity recommends reviewing a plan at least once a year to adjust for life changes and ensure everyone is still on the same page.

Want to Know Where You Stand?
For couples wondering how well they communicate about financial matters, Fidelity has developed a new interactive Couples Quiz to take and compare answers, along with a Conversation Starter guide to help navigate the retirement planning process. The quiz reveals your financial personality and then provides a detailed checklist of next steps, along with a link to send the quiz to a spouse, friends or family members. It’s available for desktop, tablet, and mobile users at www.fidelity.com/couplesquiz.

To learn what to do with this information, or simply how to jump start critical retirement planning conversations in your household, Fidelity offers additional resources at no cost, including:

• Educational Fidelity Viewpoints articles, including Who manages the money in your family?, as well as articles designed to help facilitate difficult financial conversations, are located at a hub devoted to women called Special report: Women and money.

• Online retirement guidance and planning tools that provide couples easy ways to tell if they are on track to meet their goals

Seminars, webinars, and online learning modules to help couples learn about key retirement issues and how to prepare for them

• Couples may also visit one of Fidelity’s 182 Investor Centers or call 1-800- FIDELITY (1-800-343-3548) for a joint consultation with a Fidelity investment professional.

About the Study
Fidelity’s online, bi-annual study, which was launched in 2007, is unique in that it tests agreement of both partners in a committed relationship on communication, as well as their knowledge of finances and retirement planning issues. The 2013 Fidelity Investments “Couples Retirement Study” analyzed retirement and financial expectations, and preparedness among 808 couples (1,616 individuals). Respondents were required to be at least 25 years old, married or in a long-term committed relationship and living with their respective partner, and have a minimum household income of $75,000 or at least $100,000 in investable assets. The 2013 study expanded on studies of prior years by including 109 Gen X couples and 109 Gen Y couples, in addition to retired and pre-retired couples ages 47 and older. Gen X couples were between the ages of 35 to 46 while Gen Y couples were slightly younger, between the ages of 25 to 34. The 2013 study also included 110 couples who were not married but reported being in a long-term committed relationship. Fidelity Investments was not identified as the sponsor. GfK’s Public Affairs & Corporate Communications division executed the study, which fielded in May 2013.

For more information on Fidelity Investments®’ fourth “Couples Retirement Study,” an executive summary and infographics can be found on Fidelity.com.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.2 trillion, including managed assets of $1.8 trillion, as of August 31, 2013. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.

i The World Bank, based on the most recent data using births in 2011
ii National Marriage and Divorce Rate Trends, Centers for Disease Control and Prevention

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