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Data and Research October 16, 2023
Women Still Less Likely Than Men to Feel Ready for Retirement
Generation X women are also the least likely to have a financial plan, according to a Northwestern Mutual study.
Reported by Noah Zuss
Both men and women are feeling less financially secure and prepared for retirement these days.
What’s more, in 2023, a lower percentage of women feel financially secure (43%) and financially prepared for retirement (44%) than men (59% financially secure, 61% prepared for retirement). All of those numbers are lower than in 2022, when 47% of women said they felt financially secure and 50% said they were prepared for retirement, while 64% of men reported feeling financially secure and 66% of men reported feeling prepared for retirement, according to Northwestern Mutual’s “2023 Planning & Progress Study: Women & Wealth.”
“The figures show that feelings of financial security and feelings of being financially prepared for retirement have declined for both men and women year-over-year,” Jessica Majeski, a wealth management adviser at Northwestern Mutual, says by email.
Beyond the gender differences, Northwestern Mutual’s research revealed generational contrasts in retirement preparation between women of different ages.
Nearly six in 10 (59%) of women in Generation Z expect they will be financially prepared for retirement, compared to 43% of Millennial women, 38% of Generation X women and 48% of Baby Boomers 58 and older, the Northwestern Mutual study found. The study did not specify which birth years it used to sort respondents into generation cohorts.
Many Gen X women trying to save for retirement face challenging circumstances of raising families while also caregiving for older relatives, Majewski adds.
“Many Gen X women [are] feeling stretched,” she says. “This generation of women is the highest age demographic and the closest to retirement. Seeing that on the horizon can increase anyone’s anxiety if they have not fully planned for what’s next.”
Overall, 58% of women surveyed said they do not have a financial plan, including 67% of Gen X women, 52% of Gen Z women, 52% of Millennial women and 57% of Boomers+ women.
To help these groups, plan sponsors should build greater supports for women by reinforcing positive financial acts, Majeski adds.
Employers can “proactively teach their employees about the impact of compounding, why not to leave free money on the table, why to take advantage of Roth contributions (this one is huge), always make systematic contributions and increase them over time,” she says. “Oftentimes, the highest-functioning professionals don’t understand these basic concepts.”
The task is to “reinforce that the name of the game is to save as much as possible every pay period, invest aggressively for the long term and stop looking at statements or account values,” Majeski explains. “Pay yourself first. It’s too easy to spend too much if you don’t make retirement savings a top priority.”
Overall, the study found 64% of all women prioritize paying down debt over saving money (including 77% of Baby Boomers, 67% of Gen X and 52% of Millennials), but saving money was reported as a higher priority by Generation Z (53%). The survey was fielded in late February and early March, well before federal student loan payments resumed in October.
Women of different generations also reported similar concerns about retirement, including:
Biggest fears/concerns about retirement | All women | Gen Z women | Millennial women | Gen X women | Boomers+ women |
Outliving your savings | 45% | 41% | 39% | 52% | 46% |
Declining health | 41% | 42% | 30% | 50% | 49% |
Boredom | 30% | 36% | 29% | 27% | 34% |
Drifting, feeling uncertain or indecisive about where to focus your time, attention and energy | 17% | 34% | 17% | 14% | 14% |
Isolation from friends, family, coworkers | 14% | 25% | 15% | 10% | 14% |
Missing your career | 13% | 23% | 15% | 9% | 13% |
-Source Northwestern Mutual
Data for the came from the Harris Poll, which conducted 2,740 online interviews among the general U.S. adult population, with oversamples of Generation Z & high-net-worth individuals (total household investable assets, excluding pensions, retirement plans and property, greater than $1 million) from February 17 through March 2.
