When it comes to the stock market, 54 percent of the pre-retirement women surveyed say they are "frightened" by the idea of entrusting their savings to the market, nearly double the number of men—30 percent—who say they feel this way.
A total of 42 percent of women surveyed say they feel "intimidated" by preparing for retirement either "sometimes" or "often," as opposed to 29 percent of men. And 47 percent of women feel investing "takes more knowledge and skill" than they have, as opposed to 30 percent of the men surveyed.
"Women need to become more comfortable and confident with retirement saving and the basics of the market so they can create a nest egg that will last," said Lynne Ford, director of Wachovia's Retail Retirement Group.
One difficulty working women face in saving for retirement is that many do not have a 401(k) plan. Of the employed women surveyed, 31 percent said they do not have access to this savings vehicle, versus 19 percent of the men surveyed. Among women who report having a 401 (k), only about a quarter contributed the maximum amount allowed in 2007 versus 33 percent of the male respondents.
An equal number of women and men report having an IRA: 63 percent of women and 65 percent of the men.
Gender Differences in Retirement: Behaviors and Perceptions
In retirement, more women, 35 percent, than men, 22 percent, report withdrawing 10 percent or more of their retirement savings to pay for living expenses. The industry recommendation is to withdraw no more than 4 percent annually.
According to the study, women are also less inclined to link their satisfaction in retirement to how much money they have or to see themselves as having planned effectively for retirement during their working years. Of the men and women who had retired and said it was going "somewhat better" to "much better than expected," money and planning had a significantly different impact on happiness for each gender.
A strong majority—65 percent—of men said they have "more money than they expected," as opposed to 55 percent of women. Also, 53 percent of men said they "planned effectively before retirement for their finances" versus 44 percent of the women surveyed.
"The study shows us that more men attribute their satisfaction in retirement to having more money than do women, and more men say they planned effectively in the pre-retirement years than do women," Ford said. "We'd like to see an increase in women citing planning as an ingredient for satisfaction in retirement because having a plan will help people achieve a greater sense of stability."
Richard Day Research of Evanston, Ill., conducted 2,100 online interviews for Wachovia with respondents between the ages of 35 and 70 and with household assets or income of $75,000 or more, either currently or in the year before retirement, excluding the value of real estate holdings. Members of the media can obtain a full study by contacting Amy Jones at (704) 383-4995.
Women and Retirement Tips
Wachovia offers a robust retirement Web site at www.wachovia.com/retirement, but here are some specific tips focused on women and retirement.
Stop Worrying & Start Planning
Anxiety won't help you become more prepared for retirement, but if you start putting pencil to paper you can create a plan that works for you.
- Look at your current earnings power and think about recreating 70-80 percent of that amount in retirement by saving now - it's never too late to start.
- Analyze how much money comes in each month and how much goes out—track what you spend so you can find ways to cut back on spending and put more cash into savings.
Take Advantage of Your Company 401(k) Plan
Gain Confidence - Educate Yourself
You don't have to be an expert—just get started and learn about the basics of compounding retirement savings over time.
- You can start at any age.
- Approach planning based on the stage of life you are in.
- Visit Wachovia.com/women—a great place to start learning what you can do based on your age and life events.
Expect to Live Longer
On average, a woman retiring at age 65 can expect to live another 20 years. Savings can increase a woman's chances of having enough money to last in retirement.
- Longevity increases the need for a secure and longer retirement income stream.
- Prepare, plan and protect a withdrawal strategy to help make your income last
- Plan for the unexpected (like rising cost of health care).
- Postpone taking Social Security benefits until after 65 if possible (benefit could be larger).
- Check out living to100.com, to calculate your anticipated life expectancy.
Talk With a Financial Advisor
Seek a financial partner who will listen to your needs and objectives and will help you build a plan:
- A good advisor will help prioritize your goals and re-evaluate your plan as your situation and goals change.
- If you have an advisor, make sure he or she has prepared a plan that effectively outlines your vision and your goals and provides regular updates on progress.
About Wachovia
Wachovia Corporation (NYSE:WB) is one of the nation's largest diversified financial services companies, with assets of $808.9 billion and market capitalization of $53.8 billion at March 31, 2008. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,300 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. Globally, clients are served in selected corporate and institutional sectors and through more than 40 international offices. Our retail brokerage operations under the Wachovia Securities brand name manage more than $1.1 trillion in client assets through 18,600 registered representatives in 1,500 offices nationwide.
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