Women More Confident About Retirement But Feel Less Prepared Financially
Only two-thirds of female respondents say they’ve made financial preparations for retirement – down from 72% last year
MINNEAPOLIS – (December 5, 2012) – More women report feeling confident about their retirement than in the past two years according to new findings from the 2012 New Retirement Mindscape® City Pulse index by Ameriprise Financial (NYSE: AMP). One in four women (24%) report feeling very confident they’ll reach their retirement goals and another 44% report feeling somewhat confident. Only 20 percent say they feel worried when they think about their retirement – down significantly from 25% last year. Despite this trend, the fewest number of women since the index began in 2010 report making any kind of financial preparations for this milestone (66%).
“It’s great to see that women are feeling more confident about their financial future,” said Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial. “These positive sentiments may be attributed to any number of factors, but unless these women’s feelings materialize into real financial preparation, they’re not necessarily an indicator of how ready women are for retirement.”
While women are as confident as men, they have some catching up to do when it comes to financial preparation. Only 44% of female respondents say they’ve contributed to a workplace retirement plan, compared to 51% of males. Ten percent fewer women than men have set aside funds in their own investments (42% vs. 52%) and only one in five (19%) have determined the amount of income they’ll need in retirement compared to 28% of males.
This lack of financial planning is especially concerning because many women face unique challenges in preparing for retirement like lower earning power and more time spent out of the workforce to be a caregiver. Women also neglect to express more concern than men about the obstacles they may face in retirement. For example, one of the most prominent of these hurdles for women is longevity – on average, women outlive men. The average life expectancy for American women is about 80 years (compared to 75 years for men), yet 24% of women underestimate the years they’ll need to tap into their retirement funds, saying that they plan to live from their savings for only ten years or less. Also, only half (48%) of women admit they’re concerned they’ll outlive their retirement savings.
Women are also significantly less likely than men to say they anticipate changing their planned retirement date (23% vs. 28%). This, combined with their lower levels of financial planning, suggests they may not be considering the possible obstacles – before or during retirement – that might come their way and derail their goals.
But women are planning for some aspects of retirement. More than half (56%) say they’re making plans to stay healthy in retirement (compared to only 49% of men). Nearly as many (45%) report making plans to spend time with family, and significantly more female respondents say they’ve been making plans to do more meaningful work in retirement (24% vs. 17%) this year compared to in 2011. Overall, 77% of women admit they’re making plans for at least one lifestyle activity in retirement, and 44% report preparing for three or more specific activities.
“Attaching numbers to their lifestyle goals allows women – as well as men or couples – to track their progress over time, which is a key part of any financial plan,” said de Baca. “Women should continue thinking about how they want to spend their retirement years and emotionally preparing to leave the workforce. But while confidence in one’s ability to reach retirement goals is crucial, it should be supported by both emotional and financial preparation.”
About the survey
The New Retirement Mindscape 2012 City Pulse indexwas created by Ameriprise Financial utilizing survey responses from 10,063 U.S. adults ages 40-75. The survey was commissioned by Ameriprise Financial, Inc. and conducted online by Harris Interactive from June 13-25, 2012. The national average sample and the 30 U.S. metropolitan areas were each weighted independently to best represent each area. Propensity score weighting was also used to adjust for respondents' likelihood to be online.
About Harris Interactive
Harris Interactive is one of the world’s leading custom market research firms, leveraging research, technology and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries. For more information, visit harrisinteractive.com.
About Ameriprise Financial
At Ameriprise Financial, we have been helping people feel confident about their financial future for over 115 years. With outstanding asset management, advisory and insurance capabilities and a nationwide network of approximately 10,000 financial advisors, we have the strength and expertise to serve the full range of individual and institutional investors' financial needs. For more information, or to find an Ameriprise financial advisor, visit ameriprise.com.
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
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