by Manisha Thakor
Are you worried about ending up old and poor?
The Transamerica Center for Retirement Studies, a non-profit, private foundation, recently released the results of their 11th annual survey on retirement issues. The study is packed with eye-popping data such as:
- 74% of women feel they do not know as much as they should about retirement investing
- 40% of women have $50,000 or less saved for retirement
- Only 3% of women feel knowledgeable about asset allocation
Industry veteran and President of Transamerica's Center, Catherine Collinson, was kind enough to share her thoughts on how we can "Help Women Become Golden Girls."
What finding shocked you most about this retirement survey?
The complete lack of awareness of the issue. It's just not on women's radar screens... or men's. There is a lack of awareness of the basic math in terms of calculating the impact of time in and out of the workforce on retirement savings. There’s a big difference between saving consistently over a career that spans a steady 40 years versus a career that may be limited to only 25 years due to starts and stops - which can happen when you take time to raise kids and care for elderly parents.
Why do you think women start saving at a median age of 30, two years later than men?
Again, it's a lack of awareness and education around the urgency of the situation. One issue is where women get their financial information. As you can see in our survey report, women cite more informal sources such as family and friends whereas men cite more formal sources such a personal financial websites, retirement plan provider websites, and financial professionals. If we can get women more engaged in types of outreach tools and resources where the info is... we can crack the code. Additionally, 32% of women say they are just getting by covering basic living expenses* vs. 25% of men. (*My hypothesis is we earn less yet are expected to groom more. Catherine also points out that industries dominated by women tend to pay less in general).
Why do fewer women have access to 401(k) type accounts than men?
It's a direct reflection of more women working part time than men. 81% of women who work full time have access to a 401k(k) type plan versus only 50% of the women who work part time.
What steps can women take who find themselves light on retirement saving?
Start saving now and, if you’re already saving -- save more. If you are over age 50, catch up contributions are a fantastic opportunity to save more for retirement. And have a strategy. Most women don't have one. Once you put all the pieces on the table you will find opportunities you never thought of. Think back to the show The Golden Girls - they were roommates and had a blast. It's managing the best with what you've got.
In your press release you state, "It is critical for the retirement industry, media and policy makers to respond by providing information, tools and resources tailored to women to help them thrive in their golden years." What would be some ways to do this?
It goes back to making this subject part of the normal conversation between women. For those media outlets that draw a lot of women - add this to part of the dialogue. High school is also a great place to do it. For example, I am forever glad I was required to take typing, it’s an invaluable life skill. Now, let's add financial skills.
What last thought would you like to leave women with?
It's never too soon to start saving for retirement & it's never too late. We each have unique opportunities to become golden girls, but we have to educate and take action ourselves.