Why Retirement is Different for Women

Some strides have been made toward gender equality since women won the right to vote in 1920. But men and women aren't exactly equal when it comes to retirement.

Women and Retirement
Women and Retirement

Women are more likely than men to spend their golden years in poverty. According to a report from the Women's Institute for a Secure Retirement, more than one in 10 women in retirement live on less than $10,000 a year.

The reason is attributable to financial physics: Women earn less than men over their lifetimes and live longer.

"This is not a complicated picture. And it's not a pretty picture," says Jim Toedtman, editor of the AARP Bulletin.

Women are risk averse
It's not that women don't worry about retirement. A recent study from the Society of Actuaries, "Risks and Processes of Retirement Survey Report," found that women are more anxious than men about that time of their lives.

"The actuaries found that women are more concerned about the risks," says Anna Rappaport, consulting actuary and chair of the Society of Actuaries' Committee on Post-Retirement Needs and Risks. "Fifty-seven percent of women are concerned about being able to afford long-term health care compared to 47 percent of men."

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Also, in investment matters, women are risk-averse by nature.

"Women tend to be more conservative investors," says Phyllis Silverman, vice president of PNC Wealth Management and director of Women's Financial Services Network at PNC.

But women know they should be saving for retirement -- and they are doing so.

The 2008 Retirement Confidence Survey by the Employee Benefit Research Institute found that employed women were almost as likely as employed men to contribute to an employer-sponsored retirement plan.

Similarly, Bankrate's retirement survey found that women were just about as likely to have a retirement plan as men, with roughly two-thirds of each gender saving in a tax-advantaged account specifically for retirement. (Men did come out ahead by about 5 percentage points, however, with 68 percent owning an account versus 63 percent of women.)

Women are less confident
In Bankrate's survey, men expressed more optimism about their future retirement comfort than women, with 34 percent believing they would have more than enough money, compared to just 20 percent of women.

Mary McGrath, Certified Financial Planner and vice president at Cozad Asset Management, believes it may come down to a question of self-confidence.

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