Women on Track to Run Out of Money in Retirement: MassMutual

How Much Risk?

Women in the survey expressed more concern than men about a major bear market, stock market volatility in general, taking too much investment risk and making a poor investment decision.

Overall, 81% of women said they were uncomfortable taking investment risk, compared with 71% of men. Retired women were especially were discomfited by investment risk as only 64% were content with taking on at least some risk, compared with 72% of retired men and 74% of pre-retired women.

Higher levels of discomfort with financial risk among women showed up in their current investment allocation. They were more likely than men to describe their current investment mix as a balance of growth and preservation, while men were likelier to say theirs was tilted toward growth.

MassMutual noted that women’s risk aversion may be misaligned with their long-term goals. Nearly two-thirds of women strongly agreed that they wanted their investments to continue growing in retirement, compared with a little over half of men.

One interesting note: Whereas most advisors tend to encourage more conservative investing in retirement, women with an advisor were likelier than men to report that their advisor had suggested they invest more aggressively.

“Retirement plan providers and financial advisors need to do a better job of connecting with women, providing more education to help them become more comfortable with longer-term investment concepts such as taking smart risks, meeting income needs and how to balance growth and preservation,” Hassara said.

Open to Financial Advice

The survey results showed that women were less familiar than men with certain types of investments, including actively and passively managed mutual funds, customized investments and target date funds. Although TDFs aim to streamline investment allocation, only 57% of women found them easy to use, compared with 65% of men.

Women were less likely than men to actively monitot their finances, according to the findings. Less than half of women checked their investment performance weekly, versus two-thirds of men. And three-quarters of women versus about two-thirds of men preferred an investment option that let them “set it and forget it.”

Although women tended to be less familiar than men with investment options and less proactive in financial management, the survey found they were open to education and advice. Sixty-one percent of women preferred to delegate financial decisions, versus 45% of men.

The survey found that 72% of women in the sample were currently working with a professional financial advisor, compared with 57% of men. Not only that, but 79% of retired women were receiving financial advice, compared with 68% of both retired men and pre-retired women.