Although the percentage of men and women saving for retirement is nearly equal, women need to invest more money for retirement because as a group, they tend to invest more conservatively than men, a recent survey reveals.
The 1999 Women's Retirement Confidence Survey, sponsored by the Employee Benefits Research Institute, the American Savings Education Council and the Mathew Greenwald & Associates, all of Washington, D.C., found that only 27 percent of women polled are willing to take a substantial financial risk for substantial gain. The survey, released in November, is based on the responses of 376 women aged 25 or older.
"Ultimately, women will need to save more money for retirement than men to ensure adequate income replacement," said Don Bland, president of the American Savings Education Council. "So, the idea that women invest more conservatively may mean that they will fall short of their savings goal."
The survey also revealed the number of women saving for retirement increased 12 percentage points between 1994 and 1999. Seventy percent of women 25-years-old and older are saving for retirement versus 58 percent in 1994.
Women's awareness of the need to save for retirement has apparently risen because of media coverage, seminars conducted by asset management companies and through employers.
Newspapers and magazines were the financial information sources for 58 percent of the women polled and 26 percent said they had attended financial seminars. Fifty-six percent of the women polled said they learned about the need to save for retirement through literature provided by their employer, said Pam Ostuw, a research analyst with EBRI.
The survey also found that:
* Forty-eight percent of women believe personal assets saved through a work sponsored retirement plan will be a major source of retirement income.
* Forty percent of women believe employer provided pensions, defined contribution plans and retirement accounts will be a major source of retirement savings.
* Twenty-five percent of women expect Social Security to be a major source of retirement income.
* Twenty-eight percent of women believe personal assets saved through a plan outside of work will be a major source of retirement savings.
* Sixty-two percent of women said they would use the advice of a financial adviser. By comparison, only 49 percent of men said they would.
* Seventeen percent of women versus 25 percent of men said they would use computer software for investment decisions.
While the numbers show improvement, there are still many women that are not prepared to handle their financial needs, according to Boni Callaway, financial education coordinator for INVESCO Funds Group of Denver, Colo.