A recent survey of 401(k) participants uncovers some surprising trends along gender lines in participants’ attitudes about retirement planning and investing.
The online survey of more than 1,000 of MassMutual’s retirement plan participants found that, overall, 75.8% of participants were optimistic about the stock market, trusting that there will be an upswing in the next 12 months, compared to only 7.6% who think it will decline.
However, while women were just as optimistic as men in regards to the market outlook, women were notably less confident in making their own investment decisions (32.5%), compared to men (47.8%). Similarly, more men enjoy managing their investments (61.5%) than do women (48.1%). Also, women shirk away from managing their accounts so much so that 39.3% of women prefer to spend as little time as possible on investment decisions, compared to 28% of men.
In total, 70.9% of participants enjoy learning about investments compared to 8.2% who don’t, while a higher percentage of men (75.4%) enjoy learning as opposed to 63.1% of women.
The survey was conducted by MassMutual’s Retirement Services Division between Nov. 15, 2009 and Jan. 15, 2010.
"Regardless of gender, being able to retire is the greatest concern among 401(k) participants (37.3%) – more than double the concern about healthcare costs (16.0%), job security (14.5%) and managing debt (12.2%)," says Elaine Sarsynski, executive vice president of MassMutual's retirement services division. "While almost nine times as many participants believe that they need to save more for retirement as don't (72.9% vs. 8.2%), women are more concerned that they won't have enough saved (70.3%) compared to men (63.2%)," she adds.
Further, the manner in which male and female participants prefer to learn about retirement planning also differs. "By an overwhelming majority, participants prefer to receive their information from their retirement plan provider and financial adviser (67% combined) than other sources," notes Sarsynski. "It is incumbent upon providers and financial advisers in the retirement space to provide the information necessary to help both men and women make good decisions."
When asked how they approach retirement planning in the current economy, overall 40.3% reported becoming more conservative, 32.9% became more aggressive, and 26.8% have not changed their approach.
Men who changed their approach were fairly evenly divided between those who became more conservative (39%) and those who became more aggressive (35.3%). Women, on the other hand, were far more likely to take a conservative approach (42.5%) than to be more aggressive (27.7%) and a review of their account balances supports this finding.
Average account balances of female participants revealed far less volatility than those of men, reflecting their more conservative investment selections and indicating their actual behavior lined up with their survey responses, MassMutual’s analysts note.
What’s more, women were also more likely to seek help from a financial professional than men. Only 10.2% of surveyed participants currently work with a personal financial adviser.
Still, the percentage (30.0%) of participants who are more likely to seek help from an adviser because of the recession is more than double the percentage who are less likely (12.7%), with the remainder no more or less likely to seek help than before.
An important discovery, women are almost 25% more likely to already work with an adviser than men (11.9% vs. 9.6%) and are almost 20% more likely than men to seek help as a result of the recent economy (34.1% vs. 28.8%).
