A news release about the latest Transamerica Small Business Retirement Survey said that despite similar plan participation rates, female workers are less confident that they will be able to retire in a lifestyle they would consider comfortable and have less money saved for retirement compared to male workers ($71,800 for women versus $122,700 for men).
Though women are less prepared for retirement than men, they feel just as strongly that a 401(k) plan is an important benefit. In fact, when asked to choose between excellent retirement benefits or a higher salary, women were more likely to choose the security of excellent retirement benefits, the survey found.
“Many women are suffering from a confidence crisis. They’re much less likely than men to believe that their personal finances or the economy will improve in the next twelve months,” said Catherine Collinson, retirement and market trends expert for the Transamerica Center for Retirement Studies, in the news release. “More than half of women surveyed believe that they could work until age 65 and still not have saved enough for retirement – and if they don’t take action, they may be right.”
According to the announcement, they survey found that women may not be taking full advantage of available savings vehicles. Although employed men and women started saving at the same age (27 was the median for both) and both participate in their company retirement plans at similar levels (76% of women and 75% of men), women lag behind men in several important areas:
- Women report contributing a median of 6% of their pay to their company-sponsored retirement account, compared to 7% for men.
- Women report spending five hours per year monitoring and managing their retirement accounts, compared to 10 hours for men.
- Women report lower current retirement savings ($71,800 for female workers versus $122,700 for male workers).
- Women report not knowing as much as they should about retirement investing (80% for female workers versus 67% for male workers).
Despite having increasingly longer life expectancies, women estimate that they will need to save an average of $639,000 to meet their retirement goals – one-third lower than men, who estimated they would need an average of $941,000.
Both men and women could benefit from more careful planning. According to the survey, about one-third (31%) of both men and women are guilty of basing their estimates on guesswork, rather than through a worksheet or calculator (12%) or with the help of an advisor (9%).
Harris Interactive) conducted the telephone survey between August 31 and October 6, 2004 among 601 US business employers who have a role in decisions regarding employee benefits; of these employers 365 work for a small business (10-499 employees) and 236 work for a large business (500 or more employees). Also surveyed were 1,201 US full-time business employees ages 18 and over of whom 666 work for a small business and 535 work for a large business.
More information about the Transamerica Center for Retirement Studies is at www.ta-retirement.com/thecenter .