Women Less Confident About Retirement
Survey shows men are more confident than women about their retirement planning, not to mention their ability to retire overall; some argue pay and promotion discrepancy is a big factor.
By Kristen B. Frasch
There's a pretty notable gender gap when it comes to confidence in one's ability to retire and still stay within one's current means.
So suggest the latest findings of a survey conducted by American United Life Insurance Co., a OneAmerica company. According to the OneAmerica Retirement Plan Participant Survey, 45 percent of men (out of a total of 6,360 respondents) said they were either "confident" or "very confident" when asked if they believe they will be able to retire and maintain their current lifestyle. Only 33 percent of women gave the same responses. In contrast, 44 percent of women and 36 percent of men say they're "not sure."
"These findings help underscore how important it is for plan sponsors to understand where the gaps are in perception, education and confidence in order to target different groups of employees with important messages that help them prepare for retirement," says Marsha Whitehead, vice president of marketing communications for the retirement-services division of the Indianapolis-based company.
According to the survey report, OneAmerica companies -- AUL, The State Life Insurance Co., OneAmerica Securities Inc., McCready and Keene Inc., Pioneer Mutual Life Insurance Co. and AUL Reinsurance Management Services -- surveyed visitors to OneAmerica's participant website to determine how they learned about finances and prepared for retirement, what resources they found most effective and how confident they are with their retirement preparations.
Whitehead says the companies of OneAmerica are sharing survey results and guidance with plan sponsors to help them better inform and educate different subsets of their employees. Special attention, she says, should be given to finding opportunities to promote retirement and financial education to women, as they are historically less knowledgeable about such topics.
But Jan Combopiano, vice president and chief knowledge officer at New York-based Catalyst, says whatever steps employers take to improve retirement savings for women -- for all employees, for that matter -- such as automatic 401(k) enrollment with "opt out" instead of "opt in" provisions, "there is a systemic issue that cruelly affects women's ability to be compensated fairly and equally."
Research conducted by Catalyst, a company that works with businesses to expand opportunities for working women, has found that, on average, "even high-potential women get paid less than men from their first job, and they never catch up," Combopiano says. "This means that they earn significantly less over the course of their careers -- which, in turn, reduces the amount they can save for retirement.
"Companies need to address this disparity from the initial offer and monitor pay by level, tenure and gender throughout their organization to ensure that pay inequality doesn't creep in later," she says.
Women throughout the world "face the reality that they get paid less than men, get offered positions that might have them managing smaller teams and smaller budgets than their male counterparts, or might not even be offered the best advancement opportunities -- the 'hot jobs' and higher-profile assignments that bring needed visibility and experiences to develop the critical skills that will help them get to the next level," Combopiano says.
"So it might not be that women lack confidence about their own ability to manage their retirement; it may be that they are facing the cold hard truth that they are not keeping pace with men in terms of earnings," she says. "Perhaps women recognize that they could have been earning, and thus saving, more money throughout their careers if workplaces were truly meritocratic."
There are steps HR leaders can take to help women overcome their retirement fears, experts say, such as targeting women employees in communication programs, scheduling forums to help them work on their retirement plans, and addressing their needs and particular predicaments.
As Stephanie Chappell, then corporate financial gerontologist with Hartford Financial Services Group Inc., in Simsbury, Conn., said in a 2008 HREOnline™ story, "Gender Disparities in Retirement," nearly one-third of women 65 today "will live into their 90s. That's a longer period to stretch smaller savings. There's greater exposure to inflation."
Chappell, now head of her own Laguna Niguel, Calif.-based consulting practice called Lifestages Solutions, cited a Hartford study showing women perceive more barriers to retirement planning. "Men are more likely to have a written plan. Women [believe] there are too many unknowns -- how long they'll live, inflation, and it's too tough to plan," she said in the piece.