Fifty-eight
percent of people are not confident making an investment decision, slightly
improved from 60% last year, affording to the Jackson National Life Insurance
Company Investor Education Survey.
That is not likely to improve in the near future, as 30% of people have no
interest in financial education, up from 26% last year.
“It is disheartening to think that Americans may slowly be losing interest in
improving their financial knowledge, especially when you consider that most
people are not feeling very confident about investing,” says Dan Martin,
director of digital communications and strategy at Jackson. Conversely, 70% of
the respondents to the survey of 2,772 people did express interest in learning
more about finance—indicating an opportunity for advisers, Martin says.
Asked what are the most important factors when selecting a financial adviser, 48%
said honesty, followed by level of financial and investment knowledge, cited
by 26%. Asked what would make the biggest difference in their financial
outlook, 28% said working with an adviser who really understands them.
The survey also found that 43% of people want to receive financial education
primarily from an adviser, whereas 31% prefer relying on the Web.
Forty-seven percent said having enough money is their top retirement concern,
down from 57% in 2016.
According
to the NerdWallet report, “Pay Gap Closing but Women May Face
Retirement Shortfall,” the problem behind the gap isn’t necessarily due
to gender, but instead, the higher chance men have in gaining upper
management positions, and as a result, earning more than their women
colleagues. Life factors that lead to career breaks, including women aiding as caregivers and requesting maternity leave, serve as influences to this shortfall.
“When
you add that to the fact that women are living longer than men on
average, and then also taking career breaks to raise children or to care
for family members, elderly parents and things like that, all of those
add up a retirement savings gap,” says Arielle O’Shea, investing and
retirement specialist at NerdWallet.
In order to combat these challenges head on, Transamerica Center for Retirement Studies released a study
on “Seventeen Facts About Women’s Retirement Outlook…and Eight Steps to
Improve It,” listing statistics that add to the wage barrier. Survey
findings were selected from their annual Retirement Study of American
Workers.
Facts presented included figures on women understanding
retirement-based information, the future of Social Security, and 401(k)
and other benefit options for part-time workers, among others.
According
to the report, while 68% of women are offered a 401(k) or other type of
employee-funded plan, 26% of women surveyed are part-time workers, and
therefore, less likely to obtain workplace benefits.
“Women are
more likely to work part-time than men, and as we all know, part-time
workers are less likely to have success in retirement benefits,” says
Catherine Collinson, president of Transamerica. To combat this,
Collinson says plan sponsors may look to expanding eligibility for
part-time women workers, instead of solely offering the benefit to
full-timers. “If there is any way to extend eligibility to their
part-time workers, that could be very helpful to women,” she says.
NEXT: Making savings easier for women
For those with little familiarity
in retirement planning, Collinson suggests implementing convenient
features such as online retirement calculators and auto-escalation; and
adding a once-a-year event during the benefits enrollment season.
According to the report, 57% of women believe simpler advice would aid
significantly in encouraging them to learn more about retirement.
“Part
of the challenge of saving is having funds available to save, but
another is sometimes it can be really complicated with all the
paperwork, and the more convenient we can make it for people to save,
the more likely they will save,” she says.
In benefits enrollment
season, which is generally during the fourth quarter, Collinson advises
sponsors to tailor educational materials and outreach towards women.
“To
encourage people or to just work it in the process, where people just
calculate the overall enrollment, calculate their savings goals,
determine if they’re on track for their retirement, and if not, possibly
increase their contributions to the plan, [and] revisit their asset
allocation,” says Collinson. “We see this among other demographics as
well, the more a message resonates through a communications strategy,
the more reliable it is.”
What was once guaranteed income may not
be so guaranteed anymore, and yet 27% of survey respondents in the
Transamerica study expect to rely on Social Security once retirement
approaches. With talks of reformation, plan sponsors and advisers should
highly instruct participants to save, Collinson notes.
“Knowing that reforms are probably going to happen, it makes it all the more important for us to be saving,” she says.
NEXT: Paying Women a Fair Amount
While retirement planning features aid participants considerably in
saving for later years, O’Shea, investment and retirement specialist for
NerdWallet, notes that a sponsor’s main priority should always be equal
and fair pay.
“Auto-escalation and contribution is great for all
workers, but that’s not going to help women if they’re being paid a
lower salary than men,” she says.
In addition to plan features,
O’Shea recommends sponsors consistently reevaluate salaries and debate
whether they are reasonable, regardless of gender. For those struggling
to apply an equal pay plan design, O’Shea urges sponsors to seek help
from consultants.
“It sounds sort of obvious,” she says. “But that’s the first thing you
can do because that will go a long way to close the retirement savings
gap. It’s a worthwhile investment.”