A new survey by Massachusetts Mutual Life Insurance Co., released Thursday, finds that a gender gap exists in women’s preparedness for retirement.
Only one in seven women in the poll said they were very knowledgeable about managing their savings and investments, compared with one in three men.
Moreover, 43% of women, and 46% of pre-retired women, were uncertain how long their savings and investments would last in retirement, versus 33% of men.
(Related: Women and Men Give Differently in Retirement)
The survey found that this high level of uncertainty contributed to a big income gap. Women on average anticipated living 25 years in retirement, but having sufficient income for only 20 years.
Men on average were confident they would have enough in savings — indeed, that their savings would outlast them by two years.
“The difficulty that many women face in preparing for retirement leads many to anticipate living less comfortably in retirement and running out of money five years too soon, a stunning development from a retirement-planning perspective,” Teresa Hassara, head of MassMutual’s workplace solutions, said in a statement.
Beyond savings, women in the study were less confident than men about more complicated aspects of financial management:
- How to optimize Social Security: 66% vs. 76%
- How to generate lifetime income: 60% vs. 72%
- How to meet retirement lifestyle goals: 58% vs. 68%
“There are many barriers that make it more challenging for women to prepare to retire, a reality that we need to overcome if women are to enjoy a secure retirement,” Hassara said.
She said the study showed that many women were less comfortable with financial issues and money in general, making it critical for them to have access to more education, professional financial advice, planning tools and other resources to meet those challenges.
Greenwald & Associates conducted the online survey in January, involving 804 pre-retirees and 801 retirees, all of whom were at least 40 years old.
Pre-retirees were required to have a household income of at least $40,000, work full time for a private-sector employer and be participating in that employer’s defined contribution retirement plan. Retirees were required to have total investable assets of at least $100,000, to have retired from a private-sector employer and to have been participating in that employer’s DC plan at the time of retirement.