Why Women are and Should be Concerned about Adequate Retirement Savings

According to recent research from the Insured Retirement Institute regarding women's perspectives on retirement planning, about 80 percent of women are concerned about not having enough money for retirement. More than 50 percent of the participants in the study said that they were "very concerned" about lacking enough money to be able to retire or not having enough money to retire comfortably. In comparison with men who were surveyed on the same topics, women were more concerned. About 35 percent of men expressed concerns for either lacking enough money to retire or not having enough money to live on comfortably after retiring.

In their July 2015 study, the IRI interviewed over 1,000 American participants. Of their participants, 70 percent were women. The remaining 30 percent were men. All of the participants had an annual income larger than $30,000. Ages of participants were between 25 and 65.

Researchers said that the anxiety noted among women was understandable considering the many challenges they must overcome to meet their financial security and retirement savings goals. Taking time out of the workforce to raise children and receiving a lower average income than men are two of the biggest contributing factors to the reality behind their concerns.

In addition to reducing the amount of money they are able to put away, these factors also reduce the amount of Social Security benefits they receive in the future. To complicate matters, women have longer average lifespans. This means that they are also more likely than men to outlive their retirement savings. If they want to overcome these hurdles, women must turn their concerns into actionable plans. Although the retirement planning community can help contribute in this area, experts must have a solid overall understanding of the preferences, priorities and values of women.

This study also showed what women wanted when they considered a financial adviser. In comparison with men, women put a much higher importance on how well a financial expert could explain concepts without sounding condescending. While almost 60 percent of women reported feeling that this was very important, only 35 percent of men felt the same way. Women also said that it was very important for an adviser to be a good listener, communicate regularly with them and use convenient technologies. The female participants also placed a great deal of importance on their financial advisers speaking directly to them instead of only speaking to their spouses on their behalf.

When it comes to overall financial issues, women displayed more concern than men. They were mostly concerned about their ability to pay bills, the amount of debt they owed and any declining investments. When researchers asked the male and female participants about who took the lead on financial issues in the household, about 40 percent of men reported taking the lead. Approximately 40 percent of women reported equal sharing of financial responsibilities with their spouses. About 25 percent of women reported taking the financial lead in the household.

Twenty percent of women said that they relied on their own judgment for investment choices, and 40 percent of men reported being DIY investors. The majority of women preferred to have help or to have investment choices made for them. More than 55 percent of women reported asking people in their social circle for financial advice first, and about 40 percent of men reported the same behavior. Forty percent of women and about 30 percent of men said that they preferred to contact work colleagues for financial advice.

More than 35 percent of women reported difficulty in cutting back on unnecessary expenses as being a big savings obstacle, and lacking the discipline to save was not as big of an issue for women as it was for men. In the end, researchers found that almost 80 percent of women were making contributions to a retirement savings plan. 

To learn more about saving tips and the best options for individual needs, discuss concerns with an agent.
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May 30, 2017
by Anna Lee
Insurance Advisor