Women and men approach retirement in different ways and the result is that they end up planning and saving for retirement in different ways. As a consequence, women are generally in poorer financial health at retirement than men and tend to require more assistance to navigate that phase of their lives.
The “Financial Burden” Factor
“While the top financial priority for men is to maintain lifestyle in retirement, for women, the number one goal is to not become a financial burden to loved ones, according to a 2012-2013 study by Prudential. But putting family first can be a setback to accumulating savings,” reports CNBC.
The Prudential Study titled “Financial Experience & Behaviors Among Women” found that while many women are concerned about the economy, they also remain optimistic. In the study, the majority of the women they surveyed were primary breadwinners yet of that breadwinning group, only 23% reported feeling well-prepared for retirement. That’s in contrast to 45% of male breadwinners who feel prepared.
How Women Set Financial Priorities
The difference may be related to how women set financial priorities. The study reports that women tend to be more collaborative in their decision-making and more focused on household expenses. And unlike the men who are focused on how they will live in retirement, women are deeply concerned about being a burden on their family and want to pass on money to their heirs.
Women Need to Plan More for Retirement
According to Kelly O’Donnell, Executive Vice President of Marketing here at Financial Engines who testified before the U.S. Senate Special Committee on Aging on how women are impacted at retirement, this isn’t new information. “Women are caregivers and often have gaps in their earnings and that’s if they worked. Many more rely solely on their spouse’s benefits,” Kelly explains. “For women, this means they have less money at retirement and they generally live longer.”
The Prudential Study sums up the challenge facing women in its research summary:
“Both younger and baby-boomer women are not prepared for retirement. Women under 35 have well-defined goals for their financial future…they are the most likely to see financial decision making as their own responsibility, and they feel empowered to participate in or make decisions on their own. They also show a strong interest in receiving financial advice. Yet, they are not far from baby-boomer women in their perceptions about retirement readiness, with both groups saying they are way behind or haven’t started planning for retirement.”
© 2013 Financial Engines, Inc.