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Women Save for Retirement Differently than Men

Women save for retirement

Women Save for Retirement Differently than Men by Steff Chalk

Women Save for Retirement Differently for a variety of reasons. When focusing on women’s retirement readiness, however, there can be non-fiscal reasons for their savings habits.  This fact could be a reason for revising the retirement savings message.  Or should it?  Retirement readiness — or lack thereof — in America gets a bad rap. We’ve seen the statistics: “why 74/% of Americans aren’t ready for retirement”, “42% of Americans are at risk of retiring broke” and  “nearly 45% of Americans have no retirement savings.”.

Research indicates women’ behavior is more influenced by culture and how they have been nurtured according to a recent interview by with Sallie Krawcheck, Wall Street veteran and CEO of female-focused robo-advisor Ellevest. Saving for retirement becomes more complicated for women due to a life expectancy, on average, six to eight years longer than men.  Eighty percent of women die single according to Krawcheck. Given this data, it is incumbent upon women to build as much financial security for themselves as they can during working years.

If you only pay attention to the headlines, the prognosis on Americans’ retirement readiness appears grim.  We have heard some of the reasons that workers aren’t doing all they can to achieve retirement readiness: Americans are saddled with trillions of dollars in student loan debt, Americans feel they cannot afford to save for their future because they have pressing current obligations. Also, not all Americans understand how much to save, or how to invest their savings. It is unfortunate that many Americans still do not comprehend the fundamentals of workplace retirement plans and how they work. As has been written before, U.S. employers and governmental policymakers have room for improvement when it comes to simplifying employer-sponsored retirement plans to help boost retirement readiness.

Ms. Krawcheck makes the point that women can work to overcome a gender pay gap by investing to improve their retirement readiness. She also notes that socially, women discussing money have been made to feel almost, in her words, “criminal.” Here is one very compelling quote from Ms. Krawcheck’s interview that drives that point home: “I would challenge you that there’s no amount of money you make today that you would feel comfortable telling your girlfriends about. Nothing. It’s either too much or too little… In fact, women prefer to talk about their own death more than money.”

The “gender message” difference is something of which plan sponsors should be aware as they craft and distribute participant communications. Ideally, the same message about retirement readiness could be communicated — and resonate regardless of gender — across the board. Are plan sponsors and financial services providers unconsciously communicating one way to women and another way to men? Are these messages unintentionally cramping women’s ability to achieve retirement readiness?  The retirement messages need to remain as effective as they can be to help foster retirement readiness regardless of gender. 

Steff Chalk

Steff Chalk

Managing Editor at 401kTV
Steff C. Chalk is Executive Director of The Retirement Advisor University, a collaboration with UCLA Anderson School of Management Executive Education. Steff also serves as Executive Director of The Plan Sponsor University and is current faculty of The Retirement Adviser University.
Steff Chalk

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