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WINDSOR, Conn., Feb. 3, 2011 — Despite similar individual and household characteristics, the retirement savings of working women lag significantly behind those of men, according to a new research study by LIMRA.

"Women's average defined contribution (DC) plan balances are only 60 percent of men's average balances," said Cecilia Shiner, senior analyst, LIMRA's retirement research. "This is especially concerning because women live longer than men and thus need more retirement savings. In addition to a longer average lifespan, women are more likely to have work disruptions for caregiving that hinder their capacity to save. Therefore, they need to capitalize on savings opportunities while they are working."

The report, Gender Matters: Retirement Savings of Working Men and Women, examines men's and women's retirement savings behavior. Not surprisingly, the study found that average DC plan balances of working women 50 years or older are below those of working men of the same age by nearly $63,000. While the average DC plan deferral rate is higher for women aged 50 or older, they are much more likely to earn less than men of the same age (including their spouses or partners), 53 percent versus 40 percent, respectively.

The outlook is brighter for women younger than 50 who are coupled either in marriage or civil union. Gender differences in earnings are less significant in coupled employees under the age of 50 than in those 50 years or older. Women under the age of 50 are more likely to earn the same as their spouse or partner than women age 50 years or more, 15 percent versus 8 percent, respectively.

LIMRA researchers found that across all age groups, men are more likely than women to identify retirement as an important reason for saving (see chart). This finding suggests that women are less inclined than men to prioritize and take on the responsibility for retirement saving.

Another factor the research uncovered was the relative lack of knowledge of women about financial products and services. When rating their own knowledge about financial products and services, men are more likely indicate that they are knowledgeable as compared to women, 29 percent versus 14 percent, respectively. Overall nearly three quarters of men felt at least somewhat knowledgeable about financial products and services, while only 54 percent of women felt similarly.

However, the study revealed that employees with similar financial knowledge levels, regardless of gender, are comparable in terms of their behavior toward retirement planning activities. Men and women that are knowledgeable of investments or financial products are more likely than those that are somewhat or not knowledgeable to be very involved in monitoring and managing their retirement savings. This finding may suggest that if women improved their financial literacy, they would become more active in retirement planning activities.

"As an industry, we have to do more to educate women on the importance of retirement saving and planning," said Shiner. "Companies can help employers provide the tools and information to encourage them to participate in their DC plans and become more involved in the financial decisions surrounding their retirement.

The study was conducted in July and August of 2010 and examined almost 2,500 employees, who did not work for the federal government or military, were not self-employed, and were eligible to participate in a DC plan. All survey results weighted to be representative of target sample population based on U.S. Census figures.


LIMRA is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness.

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