ING Study Reveals Challenging Retirement Realities for Women
ING U.S. today released key findings from a study1 commissioned by the ING Retirement Research Institute that sheds light on the distinct realities women encounter when saving and preparing for retirement. The study, Retirement Revealed, underscores that women on average are significantly less prepared for retirement than men.
According to the study, among those who have savings in or outside of an employer-sponsored retirement plan, men have substantially more saved than women, a striking $149,000, on average, compared to women, who averaged $108,000 in total savings. For women with children at home2, this retirement savings figure dropped even further to $88,000.
A key driver of total retirement savings is the percentage of salary that individuals contribute to their employer-sponsored retirement plan. ING’s study found that more women (42%) than men (34%) contributed just one to five percent of their salary into their plans. Fewer women (25%) than men (33%) have a formal investment plan to reach their retirement goals. In addition, well over half (56%) of women do not feel financially prepared for retirement, compared to only 42% of men.
“It is clear that many women – regardless of their age or life stage – must do more to save for their retirement,” said Maliz Beams, CEO of ING U.S. Retirement. “The combination of living longer and saving less can hamper a woman’s ability to reach her goals. Through this study and the work ING U.S. is doing to better understand women’s distinct needs, we are focused on providing meaningful guidance so that more women take action to increase their retirement savings and, in turn, become more secure and confident about their future.”
Mothers Are Challenged in Retirement Savings
ING U.S.’s study found that mothers face additional hurdles when it comes to building their retirement security. While the income gap between men and women has narrowed in recent years, mothers tend to spend more time out of the workforce due to caregiver responsibilities. This reality reduces their earning and savings potential and also lowers Social Security benefits. ING U.S.’s study found that:
- The majority (60%) of mothers do not feel prepared for retirement and almost half (46%) don’t know how to achieve their retirement goals.
- Just over half (53%) of mothers have less than $25,000 saved in their employer-sponsored retirement plan.
- Less than two-thirds (65%) of mothers are receiving their employer’s full company match compared to more than three-quarters (76%) of fathers.
Single Women More Self-Reliant for Financial Planning
The percentage of single women 18 years or older in the U.S. has more than doubled in the last fifty years from 12 to 25 percent, according to the Pew Research Center3. These women may be managing day-to-day household expenses on their own, while also trying to plan and save for retirement. Among this group, ING’s research found that:
- More single women (69%) said they relied on their own research or family and friends for financial guidance than married women (63%) and single women were less likely to work with a financial professional (21%) than married, divorced or widowed women (31%).
- Less than three-in-ten (28%) have calculated how much they’ll need to retire, compared to half (50%) of men.
- Approximately one quarter (26%) of single women spent some or a lot of time thinking about retirement, compared to a greater number (44%) of widowed/divorced women.
The study also found that women across the generations have differences in their approach to retirement and planning.
- Gen Y (age 25-34) women are most likely to have barriers to saving (86%) compared to women 35 or older (74%) and more than half of Gen Y women (56%) have outstanding student loans.
- Only a small number (6%) of Gen Y women put most of their extra money to retirement savings, whereas close to half (47%) put it towards entertainment or vacations.
- More than half (54%) of women ages 50-64 have not calculated how much money they will need to continue their current lifestyle after retirement.
- Only one-third (33%) of women ages 50-64 have a formal investment plan to reach their retirement goals.
“We can see that the financial planning needs and retirement savings goals of women reflect the demands of their lives, and for many it is a challenge to identify what needs come first,” adds Beams. “Working with a financial professional can help women address and prioritize their distinct situations so they can be best prepared for retirement.”
As a leading provider of retirement products and services, both at the workplace and through independent financial professionals, ING U.S.’s goal is to help make it easier for Americans, men and women alike, to grow, protect, and enjoy their savings across all major life stages and financial milestones. ING U.S.’s network of financial professionals includes over 2,500 registered representatives, approximately 400 of whom are female, with ING Financial Partners, a registered investment advisor and broker dealer. All advisors, male and female, offer retirement planning services and seminars to help women better prepare for retirement and also have access to ongoing, women-focused training and workshops to help them understand women's needs and how to better serve women as clients.
A key component of retirement security and comfort for women is securing a dependable income stream in retirement. The need for women in particular to ensure retirement income is magnified by longevity trends. ING Financial Partners provides retirement income materials, tools and education to advisors that help their clients, particularly women, develop a retirement income strategy.
For more information on ING U.S.’s women's study, please visit the ING Retirement Research Institute at http://ing.us/rri/ing-studies/what-about-women.
1 Findings are from an online survey conducted by ORC International during the period of Oct. 5-13, 2011. Respondents were 4,050 adults between the ages of 25 and 69 who are employed full-time with an annual household income of $40,000 or greater. Data was weighted to make the results representative of the U.S. population.
2 “With children” is defined as “with one or more children under the age of 18 living in your home”
3 “Barely Half of U.S. Adults Are Married – A Record Low”, Pew Research Center, Dec. 2011
ING U.S. constitutes the U.S.-based retirement, insurance and investment management operations of Dutch-based ING Groep N.V. (NYSE: ING). In the U.S., the ING family of companies offers a comprehensive array of financial services to retail and institutional clients, including life insurance, retirement plans, mutual funds, managed accounts, alternative investments, institutional investment management, annuities, employee benefits and financial planning. ING holds top-tier rankings in key U.S. markets and serves approximately 15 million customers across the nation. For more information, visit http://ing.us .