Women are closing the gap in saving rates for retirement compared to their male counterparts, according to fourth quarter 2012 data for defined contribution plans administered by MassMutual.
Since the third quarter of 2010, when the average account balance among female participants trailed that of men by 40.49%, the gap has been gradually closing. The average account balance among females was 38.25% in the fourth quarter, behind their male counterparts, an improvement of 5.6%.
MassMutual's fourth quarter data showed that the average deferral rate for female participants was 5.38%, an increase of 1.6% for the quarter. In comparison, male participants are saving at 5.81% on average, an increase of 1.2% from the previous quarter.
"This is a positive trend and we are so pleased to see slow but steady progress for our participants, especially our female participants," Elaine Sarsynski, executive vice president of MassMutual's Retirement Services Division, said in a statement. "We have customized our participant education offering on a number of fronts to drive action among specific segments such as women, and the progress we are seeing indicates that participants are responding favorably."
The differences between males versus females when it comes to asset allocation of investments? Females allocated primarily to age-based strategies, while men are almost evenly divided between age-based and risk-based strategies, at 52% vs. 48% respectively, MassMutual showed.
The trend of females getting more serious about their finances is reflected in a growing number of financial advisory firms seeking out single and divorced women as their clients. The general consensus among such firms: its time to acknowledge and address differences in how each gender perceives and implements financial advice as huge shifts in demographics, education and longevity are likely to shake up clients' priorities.
The main thrust of MassMutual's report and predictions from the industry is that females represent a gigantic pocket of largely untapped opportunity. According to Boston Consulting Group, more than 60% of investable assets will be controlled by women in the next few years.
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