If you’re like most women, the answer is yes. A new survey from Bank of America shows that nearly 60 percent of mass affluent women (women with $50,000 to $250,000 in investable assets) are concerned with the possibility of not having enough to support them the rest of their lives.
This finding is reminiscent of others I’ve seen. Last year, an Allianz Life survey found that more than one-quarter of women earning more than $200,000 a year fear becoming homeless bag ladies. Those most subject to these daunting scenarios? Women who are single, divorced, or widowed — i.e. on their own.
What did strike me as unusual in the Bank of America poll, however, was the fact that so few of these women seemed willing to do something about it. According to the research, 33 percent are not willing to consider cutting back on the money they’re spending on entertainment, 30 percent won’t think about cutting back on the money they spend eating out, and 28 percent won’t mull compromising on vacations. Even if they were to win $1 million, just 19 percent would set money aside for retirement.
Look, I’ve read enough behavioral finance to have fully absorbed the fact that we’re largely wired to value today over tomorrow. The Stanford Marshmallow study — in which children were offered one marshmallow, but told if they would wait 15 minutes to eat it they would be rewarded with a second marshmallow — was conducted in the 1960s and 1970s. But the story it told holds true today. Most of the 600 children tested attempted to not eat the marshmallow immediately. Only one-third did it. But in later years, the delayers had achieved higher education levels, better SAT scores and lower BMIs than the others. In other words, they were more successful.
But that was nearly 50 years ago. I would have thought we might have absorbed the importance of saving for tomorrow — at least enough to “consider” putting off non-essential expenses today (the study didn’t ask people to actually do it, just whether they would consider it) — to a greater degree. So, I did what we do in this social media age.
I threw the question out to my readers: Do you feel the same way as the women in this poll? Why or why not? Here’s what some said.
Megan wrote: “I will always worry about not having enough. I would sacrifice luxurities to save more, but where to put it after you max out IRS annual limits. $1 million? I would pay off my mortgage and small debts then save the rest. With no mortgage I could spend my salary on the ‘fun’ stuff.”
Jean wrote: “I think that people live in the moment because they have no idea how long they are going to live. If you have good health -- enjoy yourself. I agree there has to be a balance.”
Janet wrote: “I'm scared of not having enough. I don't spend a lot to begin with, so there isn't much to cut back on. The majority of my salary goes to retirement and student loans (which unless I can pay off sooner, I'll be making payments on into my 60s). I'm simply doing the best I can. That's all I can do.”
Nicole wrote: “No freakin way... I would totally cut back. I think it's important to be financially responsible and plan ahead as much as you can. In the same breath, I think it is important to indulge once in awhile. My husband is a merchant marine and we do watch what we are doing. We live modestly and are trying to make it on one salary so I can fulfill my passion of becoming a writer…Life is about finding a balance and everyone needs to do what is right for them.”
And Maria wrote: “Life is so uncertain. I guess many feel that they should spend now because they can be gone tomorrow...”
What do you think? Tell us in the comments section below.
Jean Chatzky is a member of the DailyWorth Experts program. Read more about the program here.