At the Storick Group, we are always on the lookout for interesting news about retirement to share with our clients. Recently, we came across something unexpected. When it comes to being on-track with retirement savings, gender could play a role. According to a survey released by Financial Finesse, the number of women who reported being on track with their retirement savings increased by 4.2{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} between 2012 and 2014. The number of men on track with retirement dropped by almost 2{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439}.
This information is noteworthy because it could provide key insights to differences in financial literacy and use of the financial tools provided to each gender by their employers.
The Study In More Detail
There are a few reasons why women are more prepared for retirement. One of the reasons is an increase in the number of financial literacy and financial planning programs offered by employers. Women are more likely than men to take advantage of these programs. Another possible reason could be that women handle more of the day-to-day finances. Therefore, they are more savvy about allocating the appropriate funds to their pension plans.
The number of women reporting that they have saved money in an emergency fund has risen by nearly 5{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439}. This was an estimate given between 2012 and 2014. Also, the number of women who have developed a plan for allocating their major assets has increased. The percentage of men reporting both has dropped by 1.5{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439}. The number of men who have reported running a basic retirement savings calculation dropped by almost 3{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} from 2012 to 2014 and the number of women reporting the same increased from 35{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} to 37{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439}.
There is one large aspect of retirement savings that women are overlooking. According to the survey data, only 80{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of women surveyed took advantage of employer matched pension plans. Compared to 86{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of men, women are missing the boat toward an extremely important benefit. Additionally, a greater number of women reported taking a retirement plan loan than men.
Data from the study found that men scored an average of 17 points more than women in general investment knowledge. Particularly, regarding stocks, bonds and mutual funds. 87{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of men report that they have general investment knowledge and 67{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of women reporting the same. In terms of investment confidence, 14{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} more men are confident that their investments are allocated appropriately.
What We Can Learn
The proof is in the study: whether men or women are ahead in retirement savings, both genders could use a little help. While women lead the pack with retirement preparedness, men tend to do better with investing their retirement funds. Unfortunately, retirement is not a matter of either just saving or just investing; rather, it is a complex combination of the two and many Americans (men and women alike) are ill-prepared for their futures.
Fortunately, the solution for getting everyone on track with retirement savings is a simple twofold plan: speak to a trusted financial adviser and take advantage of employee benefits, especially employer-matched pension plans. Striking a balance between your savings and investments can be a complicated process and a trusted financial adviser can help you walk through your plans.
Give one of our trusted advisers a call today. If you are worried that you are not on track with your retirement savings, it may be easier than you think to accrue additional investments or to boost your savings. A little help from a financial expert goes a long way in making sure that your future is secure.
