Traditional Won’t Do: Single Women, Blended Families Seek Retirement Advice and Products Tailored for Their Specific Needs |
|
|
|
Written by U.S. Insurance News
|
|
Friday, 22 February 2008 |
Non-traditional families could use some non-traditional financial planning advice.
Non-traditional families could use some non-traditional financial planning advice.
That’s one finding that surfaced in the new MetLife Mature Market Institute’s Family Matters study.
Middle-aged Americans (40–65) who are single or part of blended families—married with children from previous relationships—have a tougher time planning for retirement than those of traditional families (married couples with their own children). In addition, they are more unlikely to have specific income vehicles for retirement, such as a 401(k), pension plans, or annuities.
Sandra Timmermann, director of the MetLife Mature Market Institute, said that while financial professionals pay a lot of attention to the role that gender plays in retirement planning, they often overlook family structure, which is critical.
“This research shows that retirement planning for people in mid-life is strongly influenced by family dynamics,” Timmerman said. “We should not be ignoring how former spouses, stepchildren, and having no children influence savings and income for retirement as well as estate planning.”
That’s why, Timmerman continued, many middle-aged Americans seek professional planning and financial products that are tailored for families that are like theirs, not just traditional or generic advice that is more suited for traditional families. This is especially true for Single Women; 51 percent of them say they want retirement advice and tools designed for specifically for them. Forty-five percent of Traditional Families and 43 percent of Blended Families say the same.
Other key findings from the MetLife study include the following:
- 66 percent of Traditional Families feel at least somewhat prepared for retirement, compared with 56 percent of Blended Families and only 40 percent of Single Women.
- 55 percent of Traditional Families have a clear idea of what they hope to experience when they retire, compared with just 38 percent of Single Women and 48 percent of Blended Families.
- 29 percent of Blended Families and 21 percent of Single Women consistently contribute to their retirement accounts, compared to 41 percent of Traditional Families.
- 42 percent of Single Women own a 401(k), compared with 58 percent of Blended Families and 70 percent of Traditional Families. This could be due to the fact that, as one single woman noted, many single women with children work part-time and there are few employers who set up a 401(k) for part-time workers.
- 44 percent of Traditional Families have pension plans and 17 percent have annuities, while Blended Families have 41 percent and 15 percent, respectively. Single Women have 26 percent and 11 percent, respectively.
- 19 percent of Blended Families and 18 percent of Single Women are concerned that they don’t have safeguards to ensure that an ex-spouse will not try to claim their income or savings meant for themselves or their children.
The survey also revealed other general concerns about retirement, such as the fact that Single Women tend to be concerned about their lack of a safety net that a second income provides some of their married peers. This concern results in 38 percent of Single Women saying they are worried about not having a set level of monthly income to last the duration of their retirement, compared with Blended (27 percent) or Traditional (23 percent) Families.
One sentiment that all three groups shared is that they will not have enough money to cover the cost of health care in their retirement. Sixty-three percent of Traditional Families say that, just slightly less than Blended Families (66 percent) and Single Women (69 percent).
“The challenge for those in middle age is to make the unpredictable elements in their lives—the current and future needs of their children, the assets or income that go to an ex-spouse, their own healthcare and other costs—more manageable,” Timmerman said. “More security with regard to income and assets would be of great help to them as they transition into retirement.”
|
