As plan sponsors help motivate participants to save in employer-sponsored retirement programs, they should consider their employees’ savings mindsets and behaviors. Employers must take into consideration how employee preference can affect savings patterns. This is especially true as it relates to gender. A recent study of female plan participants offers insights to how women take action and engage in their employer-sponsored retirement plans. This gender analysis explores how women think about retirement, including how and when they engage in the retirement planning process.
Emotional and intellectual influences on saving for the future
When women think about retirement planning, certain thoughts and feelings are more influential than others. Men tend to rely more heavily on intellectual influencers, such as hard facts and previous experience. According to new research, hope and fear – emotional influencers – play a larger role among women. In fact, women tend to be more concerned than they are optimistic about retirement issues including:
- Paying for day-to-day expenses
- Converting savings to retirement income
- Maintaining lifestyle in retirement
- Saving enough to retire
Because emotions influence how women save and where they invest, retirement plan providers and sponsors should be empathetic to investment-related concerns and proactively address them, while helping turn female participants’ hopes into specific investment goals. Organizations should avoid fear tactics, and instead focus on optimistic, action-oriented messages. Once organizations have a better idea of how women feel about saving for retirement, they can then begin to understand how they make decisions to save.
Low engagement levels inhibit success
Very few women are fully engaged in their retirement plans and this can be attributed to the fact that many rely on their partners to be the decision-makers. Low engagement can also be the result of relying on a partner to be more involved with retirement planning. Among participants who are married or living with partners, only 35% of these women say they are the “primary decision-maker” when it comes to saving, compared to 53% of men.
Engagement is a personal experience. Plan sponsors must remember to put the person — woman or man — first in their retirement plan efforts. Plan sponsors can do this by demonstrating how a specific plan’s capabilities align to practical needs. Sponsors’ communication and education programs should address participants’ concerns and provide ways to help them to achieve their goals. If possible, sponsors should offer couples’ planning seminars and provide other resources to help engage women and their partners in the savings process.
The power of one-on-one communication