More Women Than Men Lack Confidence in Preparing for Retirement
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Wachovia’s fourth annual Retirement Survey shows that major gaps exist between men and women when it comes to planning for and living in retirement.
When it comes to the stock market, 54% of the pre-retirement women surveyed say they are “frightened” by the idea of entrusting their savings to the market, nearly double the number of men—30%—who say they feel this way.
A total of 42% of women surveyed say they feel “intimidated” by preparing for retirement either “sometimes” or “often,” as opposed to 29% of men. And 47% of women feel investing “takes more knowledge and skill” than they have, as opposed to 30% of the men surveyed.
“Women need to become more comfortable and confident with retirement saving and the basics of the market so they can create a nest egg that will last,” says Lynne Ford, director of Wachovia’s Retail Retirement Group.
One difficulty working women face in saving for retirement is that many do not have a 401(k) plan. Of the employed women surveyed, 31% said they do not have access to this savings vehicle, versus 19% of the men surveyed. Among women who report having a 401(k), only about a quarter contributed the maximum amount allowed in 2007 versus 33% of the male respondents.
An equal number of women and men report having an IRA: 63% of women and 65% of the men.
Gender Differences in Retirement: Behaviors and Perceptions
In retirement, more women, 35%, than men, 22%, report withdrawing 10% or more of their retirement savings to pay for living expenses. The industry recommendation is to withdraw no more than 4% annually.
According to the study, women are also less inclined to link their satisfaction in retirement to how much money they have or to see themselves as having planned effectively for retirement during their working years. Of the men and women who had retired and said it was going “somewhat better” to “much better than expected,” money and planning had a significantly different impact on happiness for each gender.
A strong majority (65%)of men said they have "more money than they expected," as opposed to 55% of women. Also, 53% of men said they "planned effectively before retirement for their finances" versus 44% of the women surveyed.
