• Retirement Planning

Is the Average American Woman Prepared for Retirement?

July 2, 2018 | Michelle Brownstein, CFP®

We’ve heard over and over that men are from Mars and women are from Venus – but how different are we really in terms of our finances?

Financial services marketing seems to think there’s a big difference by constantly targeting the “female investor.” But what does that really mean when it comes to crucial investments for major life events such as retirement? And what does it mean to be a “female investor” saving for retirement compared to their male counterparts?

Personal Capital’s recent retirement study conducted in partnership with ORC International surveyed Americans aged 18 or older to dig a bit deeper into this financial battle of the sexes to see how men and women think about financial planning and retirement savings.

Women and Retirement Planning Priorities

The results reveal that women are more likely to prioritize financial planning over their male counterparts as the key ingredient for a successful retirement — perhaps the stereotype of women being better planners than men holds some weight here. 62% of women responded that sticking to a comprehensive financial plan is one of the top ways to secure a comfortable retirement, versus only 47% of men. On the flip side, 42% of men responded that high income is their golden ticket for retirement, compared to 36% of women — perhaps this is more a reflection on the income levels of traditionally male and female roles playing out in the way the survey was answered. When it comes to professional financial guidance, 24% of men stated that they put their faith in a skilled financial advisor compared to 28% of women.

Based on the survey results, women seem to be ahead of the gender curve when it comes to positioning themselves for retirement due to their stronger belief in the importance of financial planning and professional guidance. But does this translate into actual retirement preparedness for these women? According to our results: not necessarily.

The Gender Divide: Retirement Readiness

There are many factors that play into this, but a staggering 40% of women say they have no money saved for retirement, according to our survey. How does this happen, when women also seem to recognize what the building blocks to a successful retirement are? Unfortunately, according to our survey, women face unique barriers. Some key findings include:

  • 27% of women are not offered an employer-sponsored retirement plan (vs. 19% of males)
  • Of women who are offered an employer-sponsored retirement plan, 58% actually contribute, whereas 67% of males contribute to their plans.
  • 16% of women who are offered an employer-sponsored retirement plan and contribute to it do not max it out, compared to their male counterparts (26%)
  • Despite all these numbers, 30% of women expect that an employer-sponsored qualified plan will be their primary source of retirement income, compared to 23% of men.

So, while women are more likely than males to believe that sticking to a plan and working with an advisor are key to securing the retirement they desire, they are less likely to financially accomplish it.

Our Take

Women know what they should be doing to succeed financially, but for many reasons, our study finds that they are generally less prepared for retirement than men. While they believe that having a solid plan and working with a professional advisor are important elements for a successful retirement, the financial industry has not always done the best job of serving female investors, despite the lip service.

If you find yourself further behind with your retirement savings than you would like to be, it’s not too late to turn things around. Read our article, “65 Ways to Retire Smart,” for some actionable tips that you can get started with today.

Read the Survey Results

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