A new American College survey shows an overwhelming majority of women are aware of retirement income options but far fewer feel well informed about them or have written retirement plans in place.
The latest Women’s Retirement Literacy Report from The American College of Financial Services found that four out of five older American women, or 82%, have ideas for retirement income but just one in three surveyed have a formal retirement plan and only 14% feel knowledgeable about sustaining income in retirement.
The research also showed that nine in 10 women who have partners, or 94%, equally share or lead financial decision-making for their households.
In addition, female retirees and pre-retirees, ages 50 to 75, are more open to financial advice than men.
According to the study, there is a clear opportunity for financial professionals to expand their business by providing guidance to women to build financial strategies. The greatest areas of concern for women, the study said, are retirement-income planning, guaranteed lifetime income, and health and long-term care.
“Advisors need to understand that women may come to the table with different approaches to retirement planning, with many thinking about finances holistically and maybe more conservatively than men,” said Hilary Fiorella, executive director of the college’s Center for Women in Financial Services. “Whether that conservatism is based on fear or misinformation is an ideal place to start a conversation with an advisor. While this research suggests lower retirement literacy levels than men, women also demonstrate an awareness of their knowledge level, admitting what they don’t know and prioritizing financial education and advice—the sign of an ideal client relationship.”
However, even men aren’t well versed in retirement literacy. The study found 72% of men and 89% of women scored a failing grade on a 38-question retirement literacy quiz.
The study used online interviews with over 1,500 Americans between April 29-May 18, 2020, to draw its findings. Respondents were from ages 50 to 75 and had at least $100,000 in household assets, not including their primary residence.