Broker Check

Who Is Smarter With Money? Men or Women?

| February 01, 2021

By Kristi De Rycke, Registered Assistant

Do women or men save more of their salaries? Do we plan to spend our retirement doing the same or different things? Who is more confident that they are set up to retire? The Harris Poll on behalf of Transamerica Center Retirement Survey conducted a survey in 2018 of more than 5,100 workers.  Roughly 3,000 were women and 2,000 of the respondents were men. See what we are doing the same and what we are doing differently.

According to the survey, it does not matter if you are man or woman. Neither of us are very confident that we are set up appropriately for retirement. The poll found that only 23% of men are very confident that they can retire comfortably while only 12% of women responded the same. Why is this? The truth is that now more than ever, the employees are more responsible for their retirement plans. Straight pensions are down to 4% for public companies from 60% in the early 80’s per CNN Money. Government workers fair better with 84% of state and local workers continue to be offered a pension. Many people who are approaching retirement were starting their careers in the 80s and experienced the transition. Younger workers are making choices now that will greatly affect their ability to retire and the quality of retirement.

The survey of various ages showed that men and women both start to save in their mid-20s. However, 68% of women versus 81% of men save in a retirement account. This may be because fewer women are offered a plan as they are more likely to work part time than men. However, even when women are offered an employee sponsored plan, only 73% participate versus 81% of men and they contribute on average 2% less than the 10% men contribute. This can really add up. The estimated median retirement savings is only 23,000 for women and more than 3x that for men. Per CNBC, women do make 79 cents for every dollar a man makes. This is based on very raw data so does not consider job positions, part or full time or other variations. As frustrating as this wage gap can be, it means that women need to be saving a higher percentage of their wages versus men not the 2% less that the poll found. The cost of living in retirement will be the same regardless of gender. Both men and women agreed that they will need to save an average of $500,000 prior to retirement. This is a random guess for many as less than a quarter of men or women have a written retirement plan. Roughly half (although more men than women) have at least an unwritten plan. 

Who is thinking they will retire after age 65 or never retire? Both! 53% of men and 55% of women answered that it would at least be after 65. Women that plan to work past age 65 and/or in retirement state that the reasons are because they fear they have not saved enough, want the income, fear that social security won’t be enough, need the health benefits and to keep their brain alert. Men report that they plan to work longer to remain active and because they enjoy what they do. 

Who is taking care of themselves better so that they can work until they are ready to retire? Who goes to their doctor when they are experiencing problems? Ok you guessed it that is an easy one. Women are more consistently getting enough sleep, going to see their doctor when needed, watching what they eat and avoiding alcohol and cigarettes. Men are exercising more regularly.

How do we plan to spend retirement when we do finally get there? Men and women are fairly equal in planning to spend more time with family and friends and traveling. Men are only slightly more likely to work part time or full time at 56% than women at 54%.  Men are more likely to busy themselves with hobbies and women are more interested in volunteering.

Who seeks out help? Men are more likely to ask for direction. That’s right I said MORE likely to ask for direction. 39% of men use a professional financial advisor versus 17% of women. 14% of women (versus 19% of men) report frequently discussing saving, investing and retirement planning. 32% of women (versus 23% of men) report never discussing these topics. This seems to be a good indicator that women need to be talking to women about saving, investing and retirement planning as well as talking to men about it as it appears they have a few things figured out.

 19 Facts About Women’s Retirement Outlook: Select Findings from the 19th Annual Transamerica Retirement Survey of American Workers Center for Retirement Studies, 2019 © Transamerica Institute®, 2019

By Greg Johnson

This is an extremely touchy subject and my take would be typically there is a dominant member of the household who takes care of the finances and one who doesn’t pay much attention. I wish there was a more open stream of communication between couples when it comes to planning for their finances. We do our best to include both husband and wife in discussions for their financial futures as they often have differing opinions. Getting a true understanding of both of their issues, goals, and concerns helps us assemble a better plan to help them achieve what they want. Regardless of your sex, planning for your financial future is a must and working with a qualified advisor can help you get on the right track.