Women appear to be falling behind men when it comes to basic retirement knowledge.
Only 18 percent of retirement-age women were able to pass a retirement income literacy quiz, while nearly twice as many men are able to pass, according to findings from the 2017 Retirement Income Literacy Gender Differences Report (RICP).
More than 80 percent of women between the ages of 60 and 75 failed the quiz, which featured questions on annuities, company retirement plans, paying for long-term expenses, Medicare planning and ways to manage income in retirement.
This financial literacy gap between older men and women may be especially troublesome since women typically have a longer lifespan than men, and often accumulate higher health-care costs as a result, according to industry observers.
Women are newer to the work force, so the conversations revolving around investing is a newer conversation for women.Alexandra Levimanaging partner for Element Financial Group
"All people, regardless of gender, should be equipped with the knowledge that could better prepare them for retirement," said Jamie Hopkins, retirement income program co-director at The American College of Financial Services. "Women face a number of challenges that the average man does not face in retirement, including greater longevity.
"So, in some ways, women should be more aggressive investors and have better retirement income literacy rates, as they need to make their money last even longer in retirement."
Financial literacy gaps between men and women shouldn't be a surprise if you look at history, experts say.
"Guys, for generations, for hundreds of years, have invested traditionally," said Alexandra Levi, a managing partner for Element Financial Group. "Women are newer to the work force, so the conversations revolving around investing is a newer conversation for women."
Women tend to be more risk-averse and have a more conservative portfolio when it comes to investing, but it doesn't necessarily indicate a lack of financial savviness, according to JoanAnn Natola, who is also a managing partner at Element Financial Group.
"When asked a question, a woman will be more likely to say 'I don't know,' but a man will not say that," Natola said. "Women need more holistic conversations, while men will tend to make a financial decision, even without all the answers."
As for the quiz, women demonstrated lower literacy rates in 10 out of 12 knowledge categories, but did just as well or better than men in topics of Medicare insurance planning and paying for long-term care expenses.
"If you look at data, older women who are single or lost a spouse tend to rely more on Social Security," said Hopkins at The American College of Financial Services. "Women, as a group, have higher long-term care expenses and Social Security.
"For men, they're still concerned with the same topics, but not as concerned as women," he added. "Men are not as worried about changes and have lower concerns than women across the board."
When it comes to seeking financial advice, the survey found, both genders were equally likely to consult an advisor or firm for retirement planning. However, their expectations for seeking advisors tended to be different.
"Women wanted retirement and investment risks explained while men didn't care," Hopkins said. "There are different expectations when men and women are getting advice and advisors should know that.
"Advisors shouldn't assume that couples have the same desires, because they both have different needs."
Whether you're a recent graduate entering into the workforc or nearing 60 and thinking about retiring, financial literacy is a necessity for those who plan to cruise through retirement.
For women who want to take an initiative on financial education, Hopkins suggests that online resources, advisors and government tools such as the Medicare website and the MyMoney.gov are great ways start learning. However, self-confidence may be an additional key in financial decision-making.
"I think the most important thing women can do to seek help is find an advisor, online vehicles, or seminars," said Levi at Element Financial Group. "The major driver for women is about care-taking for themselves, their family, and their children.
"The thing that drives women to make decisions is what it means in the big picture or the long run."
For her part, Natola at Element said that "a checklist from an advisor or workshop is not enough."
"Knowing where money comes from and how it works and where it's going is important," she added. "Women need to be self-confident on financial knowledge."