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A new study by Prudential Financial shows that younger women are having serious thoughts about saving for their retirement. No longer considered an “over 50” issue, Millennials (ages 25 – 29) and GenXers (ages 30-42) are considering their options about retirement. The study involving Millennials, GenXers, Boomers (ages 43-61), and Matures (ages 62 +) showed an increase since 2000 of women thinking about how to fund their retirement.
“The good news is that educational messages related to women’s financial security appear to be resonating,” says Christine Marcks, President of Prudential Retirement. However, she adds, “We’ve learned over the course of eight years of research that this awareness does not always translate into action. Considering their longevity, it’s critical for women to learn about financial risks they may face and how to plan for a secure retirement.” A disconcerting trend in the research is the large gap (62 points) between the women’s confidence in their financial planning and the importance they place on achieving their retirement goals. According to the survey, only one in five Millennials, GenXers, and Boomers and two in five Matures feel “very well prepared” to make financial decisions. In comparison to older women, however, younger women are showing more responsibility in their financial planning as only 35% of Millennials expect to rely on Social Security benefits in contrast to 91% of Matures. Although Matures demonstrated more knowledge of financial products overall, the survey indicated that there was a decline in understanding of some products for all women. Although women indicated having a solid knowledge of insurance products (29%) and workplace retirement plans (28%), such understanding did not hold for mutual funds (15%), long-term insurance (13%) or annuities (10%). The way in which women get financial information and advice also varied across the generations. Many women appear to desire face-to fact contact as more than half sited using a financial advisor (34%) or family and friends (19%) as their chosen source. For the Millennials, using the internet (79%) was just as important as relying on friends and family (80%). The importance of using the internet as a primary source of financial information, however, significantly decreased across generations: 67% among GenXers, 46% among Boomers, and 45% among Matures. Women also acknowledged that procrastination plays a role in their retirement planning. One third cite family demands as creating saving delays while one in five say they do not make enough money.
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