Women & Retirement Perceptions
Will the reality of retirement live up to expectations?
Terri Fassi, CPA, MBA, CDFA
After 55, do women think more about retirement than men? One recent survey found that to be true. Fidelity Investments polled 12,000 retirement savers 55 and older and found that, within the past 24 months, 59% of women had seriously thought about when they would retire, as compared to 45% of their male peers.1
What do women enjoy doing once retired? TIAA (formerly TIAA-CREF) tried to determine that as part of its Voices of Experience 2016 survey of recent retirees. Eighty percent of women said they valued “spending time alone with personal interests such as reading.” Eighty percent also ranked “connecting with and spending time with family” as one of their activities. Seventy-five percent cited “socializing with friends;” 58%, “volunteering and giving back to the community,” and 43%, “caring for others.” Retired women were also 47% likely to participate in “fitness or more athletic strenuous pursuits,” and 40%, likely to engage in “creative pursuits,” such as writing and visual arts.2
Another poll suggests some women may have a different kind of active retirement. In its 2016 Retirement Survey of Workers, the Transamerica Center for Retirement Studies found that 56% of women planned to retire after age 65 or not at all. In addition, 51% anticipated working in retirement.3
Many women are concerned about outliving their money. A 2015 Fidelity survey of more than 1,500 women found that 60% were worried about that possibility. Even among the affluent, a notable gender gap exists in retirement savings; in its most recent high net worth client survey, Wells Fargo discovered that that the median retirement account balance for women was approximately $500,000, versus approximately $700,000 for men.4,5
Too many women approach retirement with too little saved or invested. You can cite two major reasons for that.
One, the multi-year absence of some women from the workplace (which can coincide with peak earning years, lessening the rate of retirement plan contributions). Barron’s notes that, on average, women spend 11 years out of the workforce compared to men. AARP calculates that an 11-year absence may potentially cost a woman as much as $324,000 in lifetime earnings and Social Security income.5
Two, a notable earnings gap. On average, women working full-time earn 79 cents for every $1 men earn, which may reflect everything from gender inequality in career paths to wage discrimination.6
Another factor may be a preference for extremely conservative investing (and that is a preference that many men share as well). There can be a cost for assuming too little risk in one’s portfolio. When investments are too risk-averse, an investor may lose the potential to generate returns that keep up with inflation.
How about you? How are you investing & saving to pursue your retirement dream? Do you have a strategy in place with defined goals? A chat with a financial professional may lead to the discovery of creative new ways to pursue your retirement objectives, and new steps toward creating the retirement you want for yourself.
What is that kind of professional input worth? It may make a big difference in retirement confidence and in the process of retiring. In the new TIAA study, 69% of women said their transitions to retirement were “easy,” versus 77% of men. The more confidence you have, the more knowledge you have.2,5
Terri Fassi may be reached at 970-416-0088 or firstname.lastname@example.org
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1 – money.usnews.com/money/personal-finance/articles/2016-05-19/how-and-why-men-and-women-retire-differently [5/19/16]
2 – forbes.com/sites/nextavenue/2016/04/20/retirement-life-women-and-men-do-it-very-differently/ [4/20/16]
3 – transamericacenter.org/retirement-research/women-and-retirement [1/11/16]
4 – usatoday.com/story/money/2015/02/12/women-financial-savings-retirement/22982383/ [2/12/15]
5 – tinyurl.com/jexfqwp [2/13/16]
6 – washingtonpost.com/news/wonk/wp/2016/03/08/its-2016-and-women-still-make-less-for-doing-the-same-work-as-men/ [3/8/16]