Women are less
prepared when it comes to saving for their retirement as compared to men, shows
a BlackRock survey.
Fewer
American women have started saving for retirement than American men, shows an
annual Global Investor Pulse Survey from BlackRock, which polled 27,500 investors
including 4,000 Americans.
“In
the US, 53% of women overall have started saving for retirement, compared with
65% of men. Even among those women who have started saving money, they have
accumulated less than half the retirement savings as men ($34,900 vs. $76,800).
There is also a gap in savings behaviors--whereas close to half of men (45%)
are willing to take on a high risk in order to achieve a good return on investment,
this falls to just 28% of women. Also, for women investors, cash represents a
greater proportion of their total investment than men, 68% compared to 59%,”
states a Black Rock press release.
Though
the study shows the savings habits of women in US, its findings are universal.
We spoke to financial advisors in India and found that women in India too
exhibit similar behavior when it comes to saving for their retirement.
Tejal
Gandhi of Money Matters says that generally working women are aware about the
need for planning for their retirement in India. “Those who are separated or
are single are particularly conscious of planning for their retirement. Women
have a higher life expectancy as compared to men, so the need for retirement
planning is even more critical for women. Women have less savings as compared
to men because they take breaks. Some women work part time or they work from
home which impacts their savings.”
Shifali
Satsangee of Funds Vedaa says that women in India are generally depended on their
family members to take care of them. “Women are more risk averse
than men. In India, when it comes to retirement planning, most women continue
to depend and rely on their family members or husbands. One should always
remember, that among personal financial goals one of the most crucial is the retirement
goal,” says Shefali Satsangee of Funds Vedaa.
Reduced
employment due to childcare obligations seems to have a significant impact on
women successfully saving for retirement, the BlackRock survey indicates. For
example, only about half of women age 25 to 44 are working full-time, compared
with more than three -quarters of men that age. “Women who are decision makers
at home are generally more conscious of their retirement. Women take break from
their work so their savings dip to that extent. Women are risk averse and they
prefer to invest in safe instruments,” says Dilshad Billimoria of Dilzer
Consultants.
The study shows that women need to plan for their retirement more aggressively as compared to men as they have higher life expectancy. The life expectancy for U.S. women is about 79 compared to 72 for men. In the first revision of mortality assumptions since 2000, the Society of Actuaries estimated the average 65-year old man today will live 86.6 years, up from the 84.6 it was estimated a decade and a half ago. The average 65 year old woman will live 88.8 years, up from 86.4. While this accounts for approximately two years longer, it’s important for women to realize that this is the average and their finances may need to last 10 years or more than men,” sates the release.
