In our three-part financial literacy gender gap series, the Iowa Department of Insurance and Financial Services did a deep dive into all the reasons women lag men in financial literacy and the far-reaching negative impact that has on women.
Because financial literacy is critical for Iowa women to gain financial independence and to secure a financial future, the Iowa Department of Insurance and Financial Services created the SmartHER Money program.
Before launching SmartHER Money in 2021, we conducted financial literacy research in 2020. Our objectives were to assess how active Iowa women are in the financial management of their households, determine their level of knowledge about a range of financial topics and uncover areas where financial education is needed and desired.
This research data helped us shape the structure and programming for SmartHER Money and serve as a benchmark for future studies to see how our programming is moving the needle for Iowa women.
In general, knowledge and confidence about financial topics increased as age and household income increased — the higher the income and the older the women, the greater the level of knowledge and confidence women had.
Overall, most women reported they were active in the financial management and decision-making of their households, but 40% of Iowa women still wanted to be more involved and financial knowledge was the No. 1 reason that kept them from being involved.
The most common causes of stress and anxiety regarding personal finance were retiring without having enough money set aside and not having enough “rainy day” savings for an emergency. Half of Iowa women reported they were not in a financially secure household.
When it comes to knowledge of retirement planning, 56% of Iowa women reported they were only somewhat, not very or not at all knowledgeable about it, 8% reported they have saved nothing for retirement and 45% reported they were not confident they are saving enough.
In addition to having stress and anxiety about not saving enough money for retirement, Iowa women worry about not being able to pay for long-term care and running out of money in retirement. While younger women expect to retire in their 60s, 80% of Iowa women who are in their 60s reported they expect to retire at age 74. Social Security and 401(k) are the two sources of expected retirement income for 73% of Iowa women.
According to a 2017 Pew Trust study, 48% of all Americans participate in an employer-sponsored retirement plan such as a 401(k) or pension. It is important to note that 62% of Iowa women reported an employer-sponsored plan like a 401(k) as a source for expected retirement income. It’s good to see Iowa women utilizing these plans and outpacing the national average.
And Iowa women want to learn more and do better. The two areas Iowa women frequently reported they wanted to learn more about were retirement planning and investments. Younger women and women from lower income households also requested more education and guidance regarding budgeting and debt management and reduction.
As your state government agency, the Iowa Department of Insurance and Financial Services is here to help provide financial literacy to all Iowans through our Save4Later educational curriculum and this SmartHER Money public outreach program created specifically for women. We’re here to provide you with the tools and resources to empower you to secure your financial future.