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February 23, 2011 at 10:37 AM
MassMutual's Retirement Services Division reported Tuesday that in the fourth quarter of 2010, women shifted more of their retirement assets to asset allocation investments in general, but favored target-date funds.
At the end of 2010, women had 24.3% of their retirement assets in asset allocation options, just above male participants, who had 24%. Furthermore, average balances in target-date investments are approximately double those of risk-based options, according to MassMutual, while men have assets evenly split. The Retirement Services Division attributes the gap to women recognizing a need for better diversification, and a more aggressive investment style in general among men.
In late January, the Government Accountability Office made several recommendations to the Department of Labor regarding target-date funds, including a recommendation that plan sponsors deliver a statement to participants outlining "potential consequences of saving, withdrawing, or otherwise managing TDF assets in a way that differs from the assumptions on which the TDF is based."
An earlier survey by MassMutual found over 53% of women "prefer to spend as little time as possible on making investment decisions," compared with over 35% of men. Furthermore, over a quarter of women are confident making investment decisions, compared with just under half of men.
Balances for women continue to lag behind those of men by approximately 40% and their deferral percentages are lower by 0.5 percentage points, according to MassMutual. The good news for women, though, is that they gained an average 5.7% for the fourth quarter, compared with 5.5% for men.
