Almost 1 in 3 (30%) Canadian women have reduced or stopped saving as a direct consequence of childcare or eldercare responsibilities, with around seven in 10 (69%) female investors in the country making significant financial sacrifices, according to a survey.
CIBC, which surveyed 4,591 Canadians, also found three-quarters (73%) of women said they’re actively involved in their own long-term financial planning – a number that grows higher the older they get, rising to 82% among women aged 55+.
“Women take on the bulk of care responsibilities for children and aging loved ones. However, it’s encouraging to see that despite the pull of family duties, women are jumping into the driver’s seat when it comes to their own financial well-being,” said Kathleen Woodard, senior vice president at CIBC.
“Making the decision to quit working, reduce hours or forgo career advancement can have a direct impact on savings, so it’s critical to put a plan in place and take steps to address any savings shortfall to ensure their own financial security down the road.”
Making the sacrifices
Around 57% of women said there have been consequences to their career after caring for others, compared to 45% of men.
The survey also found 83% of women are willing to make personal sacrifices to save more money, 65% of women worry about running out of money in retirement and 90% of women are the main or co-decision maker when it comes to investing.
“If you intend to take some time to provide care for a loved one, consider how you might split care responsibilities to reduce the economic impact on one caregiver and take advantage of dual employer benefits,” said Woodard. “Ramping up on contributions before your planned time-off or having a spouse contribute to your own retirement savings during the break can also help make up for the lost income.”
Confidence with investing
While women say they have a good handle on saving money (94%), household budgeting (93%), and debt management (87%), almost half (46%) admit they lack confidence when it comes to investing.
The study shows that women tend to invest more conservatively than men, favouring guaranteed investments for fear of losing money (43% compared to 35%).
And, most (76%) women said they would opt for lower risk to preserve capital rather than take a higher risk for the chance of greater returns, compared to 62% of men who would make the same choice.
The study revealed that women’s investing know-how increases as they age, growing from 44% among those aged 18-34 to 68% among those aged 55+.
Some 79% have taken action over the past year to empower themselves and grow their confidence, especially among younger women aged 18-34.
Women are also more likely than men to ask for directions and seek expert advice when investing (68% compared to 59%).
“It’s not only how much you save, but how you’re saving it that matters. Every little bit adds up, especially when you have more time to save,” said Woodard. “Investing early and regularly in a well-balanced and diversified portfolio with the potential for higher returns can get you on the right financial track and help ensure you don’t miss out on years of contributions, earnings potential and compound interest.”
