MassMutual Survey of Defined Contribution 401(k) Plan Participants Reveals Widening Gender Gap in Retirement Confidence
Women Increasingly Concerned About “Saving Enough for Retirement”
Mar 3, 2011
(Springfield, MA) - Despite the fact that 2010 was generally a good year for retirement plan investors, with average balances returning to pre-recession levels, it appears that the economic uncertainty and market volatility have contributed to lower levels of investing confidence and generally more conservative investing behavior among participants. Among women in particular, confidence in investment decisions and the stock market is much lower vs. men and the gap is widening, pointing to a significant opportunity for retirement plan advisors and providers to do even more to help educate participants regarding their investments.
MassMutual’s Retirement Services Division conducted an online survey between November 15, 2010 and January 15, 2011, of 1,517 participants in retirement plans on the MassMutual platform. MassMutual’s data indicates that men believe the stock market will improve vs. decline in the next 12 months at a ratio twice that of women (16:1 for men vs. 8:1 for women). Overall, only 37.3% of participants are confident in making their own investment decisions (vs. 42.5% last year). However, women were significantly less confident in making their own investment decisions (25.9%) compared to men (44.1%). At the same time last year, the percentages were 32.8% for women and 47.8% for men. Likewise, more men enjoy learning about investments (71.7%) than do women (54.4%), and more women (53.1%) than men (35.1%) also prefer to spend as little time as possible on investment decisions.
The survey indicates that anxiety about having adequate savings to retire is increasing. Overall, 66.6% are concerned they won’t have enough saved for retirement vs. 64.9% last year. In this year’s survey, the percentage of women concerned increased by 4.4 percentage points to 74.7%, while the percentage of men declined by 1.3 percentage points to 61.9%. Participants of both genders are also becoming more conservative in terms of their investing behavior. Among participants who made a change in their approach to investing in the last 12 months, 61.7% became more conservative compared to 38.3% who became more aggressive.
Participants Feeling “Responsible” For Their Retirement
Among all participants, 39.8% identified being able to retire as their greatest concern, up from 37.3% last year. Significantly, 74.3% agree they have more responsibility for achieving retirement income objectives than their employer. Managing debt is the greatest financial concern for participants under age 40, while being able to retire is by far the greatest concern for people 40 years old or above.
“Being able to retire is the greatest overall concern among defined contribution plan participants by a large margin – almost two and a half times the concern about healthcare costs (15.2%), and much higher than job security (11.7%) and managing debt (14%),” says Elaine Sarsynski, executive vice president of MassMutual’s Retirement Services Division and chairman and CEO of MassMutual International LLC. “In addition, 57.1% of participants are likely to seek help from a financial planning advisor in the next 12 months, with many preferring the assistance of the retirement plan advisor representing the plan.
“The good news is that more than half of all men and women in retirement plans administered by MassMutual plan to revisit or update their plan asset allocation in the next 12 months,” adds E. Heather Smiley, chief marketing officer for MassMutual’s Retirement Services Division. “We have been working diligently to help participants understand the critical role that asset allocation plays in achieving an adequate level of retirement income. From live and web-based seminars geared to specific age groups to campaigns that are segmented and targeted by age, gender, etc., we are committed to delivering messages to help participants take the most impactful next step for their own situation. All of these efforts are part of MassMutual’s standard education offering to all plans and participants. We are pleased to see that participants are beginning to take an active interest in their approach to investing. There’s a lot of work to be done and providers, sponsors and advisors need to work in concert to help every participant increase the likelihood of success,” she adds.
MassMutual’s Retirement Services Division serves approximately 1.2 million participants. For more information regarding MassMutual Retirement Services, please call your retirement plan advisor or contact MassMutual at 1-866-444-2601.
MassMutual’s Retirement Services Division has been serving retirement plans for more than 60 years. It offers a full range of products and services for corporate, union, nonprofit and governmental employers' defined benefit, defined contribution and nonqualified deferred compensation plans. It serves approximately 1.2 million participants.
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyholders every year since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.