Women want the same things as men when it comes to retirement, but don't do enough to ensure they have enough money saved, according to a new study by Transamerica Center for Retirement Studies.
As part of its 12th Annual Transamerica Retirement Survey, the center surveyed more than 1,800 American women workers to understand their outlook on retirement and to provide them with approaches to make their retirement futures brighter.
"Historically, women are more likely than men to take time out of the workforce for parenting and caregiver responsibilities. Over the course of a woman's career, these factors translate to reduced earnings and lower long-term retirement savings," says Catherine Collinson, president of the center. "An important first step toward helping women build retirement confidence is to raise awareness about the issues and then highlight ways that women can take greater control of their financial future." The Transamerica Center for Retirement Studies research outlines actionable steps women can take to boost their financial security in retirement and old age.
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The study found that women don't talk enough about retirement and if they do, they only speak with family or friends. When asked what would motivate them to take a more active role in their retirement savings, 34 percent said a good starting point and educational materials that are easy to understand.
A telling example of this need for education relates to women's expected sources of income when they retire. Over half of women, 53 percent, expect to self-fund their retirement through 401(k)s, 403(b)s, or IRAs and/or outside savings and investments; 31 percent expect to rely on Social Security. Of those women who expect to rely on Social Security, only 14 percent have "a great deal" of understanding of the benefits, and nearly as many (12 percent) indicated they have "none." Additionally, when it comes to retirement investing, the vast majority of women (78 percent) say they do not know as much as they should.
With only 8 percent of women being very confident they will be able to fully retire with a comfortable lifestyle, it's important to offer access to holistic, easy-to-use and engaging educational materials and tools that can help them create a retirement framework, set forth a plan and achieve their goal.
"Women have voiced that they want a good starting point and educational materials that are easier to understand, so it's up to the retirement industry, employers, media and policymakers to present information in a way that is easily digestible and actionable," said Collinson. "By tailoring retirement education to increase financial literacy along with offering strategies and tactics to reach savings goals, women should be much better positioned to successfully build their nest eggs. So, let's get the conversation started and make retirement part of women's daily dialogue."
The report found that the majority of women (54 percent) say they seek advice but make their own decisions about saving and investing for retirement. Only 31 percent indicate they use a professional financial advisor. Another 29 percent are do-it-yourselfers who prefer to do their own research and make their own decisions.
The majority of respondents "guessed" their estimated retirement savings goal and very few women, 7 percent, said they have a written plan documenting their retirement strategy. Fifty-three percent said they have no plan at all and 16 percent said they do have a back-up plan in case they aren't able to work before their planned retirement.
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