4 Questions Women Should Ask to Close the Retirement Gap


NEW YORK (MainStreet) -- If the past decade is any indication, women are not only crashing through the corporate glass ceiling, they’re also increasingly likely to open and run successful businesses.

That’s the good news. The bad news is that on the issue of retirement, women aren’t taking the same aggressive stance they are in the workplace. A 2011 study from Wells Fargo (Stock Quote: WFC) is the bearer of bad news on that front.

According to the study, only 54% of women claim they have enough money saved for retirement, compared to 62% of men. Also, women are less likely to have a pension from their jobs, and are less likely to believe that Social Security will be there for them in retirement. Wells Fargo also says that the median retirement savings average for women is only $20,000.

“Women hold more than half of high-paying management and professional positions in the U.S. and three women are in college now for every two men. But when it comes to retirement, they lag in their confidence about how to prepare for this phase in life, and they are less likely to see themselves in the driver’s seat,” said Karen Wimbish, director of retail retirement for Wells Fargo, in a statement. “We’d like to see women make the same kind of progress in planning and saving for retirement that they’ve made in so many other spheres of life.”

Another study by Los Angeles-based Transamerica confirms the findings, with only 8% of 1,800 women surveyed saying they “strongly agree” that they are accumulating enough cash for retirement. Researchers at Transamerica say a big part of the reason that women may be lagging in planning for retirement has to do with the sacrifices women historically make on their career path.

“Historically, women are more likely than men to take time out of the workforce for parenting and caregiver responsibilities. Over the course of a woman’s career, these factors translate to reduced earnings and lower long-term retirement savings,” says Catherine Collinson, president of the Transamerica Center for Retirement Studies. “An important first step toward helping women build retirement confidence is to raise awareness about the issues and then highlight ways that women can take greater control of their financial future.”

Beyond that big picture assessment, the Transamerica team found another possible factor driving women’s low savings, concluding that only 8% of women discuss retirement “frequently” and 30% “never” talk about retirement.

The group believes that more women would be willing to discuss savings and retirement – but they need better information first. To that end, the financial services giant offers women four “conversation starters” to help them learn more about their own retirement needs. Here’s a snapshot:

1. How do you get information about saving for retirement and what is your decision-making process?

Transamerica says that only 31% of women use a financial adviser, and 29% are “do-it-yourselfers” when it comes to retirement.

2. Do you know how much money you'll need to retire at the age you want to?

The study says that’s a key question to ask, as 60% of women surveyed can only “guess” their retirement saving goals.

3. Do you know how you’ll reach your retirement saving goals? What would happen if you lost your job or got sick before your planned retirement age?

Only 7% of women have a retirement savings plan, and only 16% have a “back-up” plan if disaster strikes.

4. Who do you talk to or where do you go to learn more about saving and investing for retirement? Why?

The majority of women, when they do talk about retirement, do so with family and friends (37%), while 29% rely on a professional financial adviser or broker, 27% rely on their retirement plan provider’s website and 25% use financial websites.

If you can provide a good answer to those four questions, Transamerica says you can really turn your retirement situation around. And that’s good advice for both women and men.

No matter what you do to plan for retirement, the people managing your money have a hand in your fate as well. Check out MainStreet’s look at 10 Resolutions for the Retirement Industry for some ways the whole system can be improved!

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