Women on average are significantly less prepared for retirement than men, and encounter “distinctly different realities” when preparing for retirement, according to a study commissioned by the ING Retirement Research Institute.
Among those with savings in or outside an employer-sponsored retirement plan, men have saved $149,000, on average, compared to $108,000 in total average savings for women. For women living with at least on child under age 18 at home, the retirement savings figure averaged $88,000.
Women plan participants tend to contribute less than their male counterparts, the study showed. More women (42%) than men (34%) contributed just one to five percent of their salary into their plans. Fewer women (25%) than men (33%) have a formal investment plan to reach their retirement goals. More than half (56%) of women don’t feel financially prepared for retirement, compared to only 42% of men.
Because they spend more time out of the workforce, mothers face additional hurdles when it comes to building their retirement security, according to the study. Serving as a housewife or full-time parent reduces their earning and savings potential and also lowers Social Security benefits. ING U.S.’s study found that:
- 60% of mothers do not feel prepared for retirement and 46% don’t know how to achieve their retirement goals.
- 53% of mothers have less than $25,000 saved in their employer-sponsored retirement plan.
- 65% of mothers are receiving their employer’s full company match compared to 76% of fathers.
The percentage of women 18 years or older in the U.S. who are single has more than doubled in the last fifty years, to 25% from 12%, according to the Pew Research Center. Among single women, ING’s research found that:
- 69% said they relied on their own research or family and friends for financial guidance, compared with 63% of married women.
- 21% of single women were worked with a financial professional, compared with 31% of married, divorced or widowed women.
- 28%) have calculated how much they’ll need to retire, compared to half (50%) of men.
- 26% of single women spent some or a lot of time thinking about retirement, compared to 44% of widowed/divorced women.
The study also found that women across the generations have differences in their approach to retirement and planning.
- Gen Y (age 25-34) women are most likely to have barriers to saving (86%) compared to women 35 or older (74%) and more than half of Gen Y women (56%) have outstanding student loans.
- Only a small number (6%) of Gen Y women put most of their extra money to retirement savings, whereas close to half (47%) put it towards entertainment or vacations.
- More than half (54%) of women ages 50-64 have not calculated how much money they will need to continue their current lifestyle after retirement.
- Only one-third (33%) of women ages 50-64 have a formal investment plan to reach their retirement goals.
Findings are from an online survey conducted Oct. 5-13, 2011 by ORC International. Respondents were 4,050 adults between ages 25 and 69 who are employed full-time with an annual household income of $40,000 or greater. Data was weighted to make the results representative of the U.S. population.
© 2012 RIJ Publishing LLC. All rights reserved.