Sometimes no news is bad news, though the findings of a recent study on women and retirement suggest that there remains an educational opportunity for many advisors when it comes to raising awareness among their female clients on preparing for retirement. It seems the confidence gap of women–the chasm between knowing something and doing something–has prevented this group from a secure financial future.
“There has been no significant change in women’s confidence levels in terms of achieving their financial goals,” Prudential Financial reports in Financial Experience & Behaviors Among Women. The fifth biennial study found that eight in 10 women believe maintaining their lifestyle in retirement is a priority, yet few are very confident they can achieve it. The survey was administered to 1,033 female sole and joint heads of households between the ages of 25 and 68, with a 2007 household income of $50,000 or more (40% of respondents represent households with an income of $100,000 or more) by Harris Interactive. There is a 62-point gap between women’s confidence level and the importance they place on this goal. Surprisingly, 36% of Millennials (aged 25 to 29) and 34% of GenXers (30 to 42) tend to worry more about a secure financial future than the older female generation even though this younger group has more time to build savings.
The reason for worry among young women may be a lack of support. The data suggests women recognize that government assistance and/or a systematic workplace savings plan may not be enough to reach their retirement goals. In reporting their expected sources of retirement income, about two-thirds of the women indicated their own personal savings. Additionally, Millennials have doubts about whether or not Social Security will be able to sustain itself by the time they reach retirement (35%), unlike the 91% of Matures–those born before 1945–many of whom are already enjoying the benefits of a Social Security check.