LIMRA discovered a disconnect between women’s concern about retirement risk and the steps they’ve taken to prepare, the organization announced Monday. The report found more women were concerned about retirement risk than men, but 32% have done no retirement planning at all.
“We know from earlier studies that working women, on average, have accumulated 40% less than men for retirement, which was confirmed again in this study,” Cecilia Shiner, senior analyst for LIMRA retirement research, said in a statement. “Even though 6 in 10 women are concerned they aren’t saving enough to last throughout their retirement, we see few women taking steps to mitigate for this risk.”
Overall, men are more likely to have taken steps to plan for retirement. Half of men have determined what their income will be in retirement and 43% have determined their expenses. By comparison, 47% of women have determined their income and 39% have determined their expenses.
Over a third of men have estimated how long their assets will last in retirement, compared with 29% of women. This is especially troublesome, as women are likely to have a longer retirement than men.
One explanation for women’s lack of action on retirement planning is that they are simply too busy and haven’t made it a priority, said Alison Salka, vice president and director of retirement research for LIMRA, on Tuesday. “They’re focused on different things and may be balancing family and work,” she told AdvisorOne.
An even larger issue, Salka (left) suggested, is women’s lack of knowledge regarding investing. “We find if people are knowledgeable, they’re more likely to take steps,” Salka said. “Knowledge is the key to engagement.
Shiner agreed, adding that both men and women underestimate the risk of longevity to their retirement. “One-third [of respondents] consider it a major concern,” she said on Tuesday.
Among women who have prepared for retirement, about a third say they are actively engaged in their retirement savings. That’s compared with 46% of men. Furthermore, while two-thirds of women said they weren’t sure they could spend their retirement in the manner they’d like to, just 26% were researching investment products that could help them meet their goals.
“Advisors have a huge role to play” in helping women prepare for retirement, Salka said. They should focus on “understanding women’s needs and educating them in a way that is not intimidating.”
Prior research from LIMRA that focuses on life insurance suggests women are more thoughtful when purchasing products and less likely than men to make a decision quickly. Advisors who are used to working with male clients may think they’re not getting the sale, when in reality female clients are just processing the information, according to LIMRA.
LIMRA surveyed over 3,000 adults in May between the ages of 18 and 34. Of those, 1,900 were women.