Research Shows Retirement Confidence Gap Between Married and Unmarried Women

According to EBRI data, there is a stark gap in retirement preparation between married and unmarried women in the U.S.

New research from the Employee Benefit Research Institute suggests that women would benefit from retirement advice that considers their marital status.

The study from EBRI shows that unmarried women are less confident in their ability to retire securely than their married counterparts.

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EBRI separated 758 female workers and 545 female retirees from a larger online sample of 2,677 Americans age 25 and up. The study weighted the sample by age, sex, household income and race using census data to make it more representative of the national population.

Among never-married women workers, 51% said they were not confident in their ability to live comfortably through retirement, versus 22% of married women and 55% of divorced women.

This insecurity comes from a variety of sources. For one, 27% of married women reported having $25,000 or less in total assets, whereas 56% of never-married and 58% of divorced women did.

Accordingly, unmarried women were more likely to say they were prioritizing shorter-term expenses over their retirement: 41% of never-married and divorced women said that saving for retirement is not a priority relative to current needs, compared with 27% of married women.

Unmarried women were also more likely to say they were prioritizing buying a home or starting a business over saving for retirement. This could suggest that unmarried women are looking for sources of independent income and wealth as a priority, or even as a substitute for retirement savings, though the study does not expand on this.

Another explanation for unmarried women’s relative retirement insecurity is that they are less likely to know who to go to for retirement advice, as 45% of never-married women said they do not know where to go for advice, versus 36% of divorced women and 27% of married women.

The study acknowledges that the responses of married women could reflect “collective knowledge,” meaning that though married respondents wouldn’t know where to go for advice themselves, they believe that their partner would.

Though the study weighted for a number of demographic factors, it did not include weighting for educational attainment. This is despite findings in the field of survey research that those without a high school degree are chronically undersampled, and those with a college degree are consistently oversampled. This is in part due to the fact that higher-educated people are more likely to have a cell phone, landline and access to the internet, and are therefore more likely to be sampled by survey researchers.

Research from Pew shows that better-educated adults are also more likely to be married, and as such the gap in retirement confidence between unmarried and married women may be due in part to married women tending to be more educated. In other words, the gap may be overstated since it does not weight for education, but it cannot be said for sure without further research.

The EBRI study also notes that unmarried women were more likely to say that debt was an obstacle to saving for retirement than married women, though it does not specify the sources of the debt. Among never-married women, 40% disagreed that debt was negatively affecting their ability to save for retirement, compared with 56% of married women.

Past research from Prudential’s Financial Pulse Survey shows that women tend to have less confidence in their retirement than men, and are less likely to have employer-sponsored retirement accounts. EBRI’s research shows that this insight can be further refined based on marital status, and can further inform the retirement investment advice provided to women workers and retirees.

Social Security Fears Drive Early Benefit Claims

Schroders finds that almost half of workers surveyed have no strategy to generate retirement income.

Many workers fear that Social Security won’t be available when they are ready to retire, according to the 2022 Schroders U.S. Retirement Survey.   

While 86% of workers age 45 and older are aware that they could boost Social Security payments by delaying the start of benefits, only 11% plan to put off claiming until age 70—when an individual reaches their maximum monthly benefit.

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“Delaying Social Security to increase your benefit is a tried-and-true means of generating more income in retirement, but it’s a path few are prepared to take,” Joel Schiffman, head of strategic partnerships at Schroders, said in a statement. “Given increasing life expectancies and widespread concerns about not being able to live comfortably without a paycheck, the advantages of creating a retirement income strategy that maximizes your Social Security benefits can’t be overstated.”   

Schroders found that 32% of respondents plan to claim benefits before 70 because they are concerned that Social Security will be depleted and/or stop making payments, and 31% said they expect to need the money sooner. The research shows that 48% of non-retired workers plan to take Social Security between the age of 62 and 65, while 19% plan to claim between age 66 and 69 and 22% are unsure when they will file.   

Among the near-retiree cohort age 60 to 65, 11% of respondents plan to take their benefits at age 70. Of the cohort, 38% cited as their reason for not waiting that they will need the money sooner.

“This validates what we found in our survey last year when we first saw that only ten percent planned to wait until age 70 to take higher benefits,” Schiffman added.

The survey also found that 48% of respondents contributing to a workplace defined contribution retirement plan—401(k), 403(b) or 457—said their plan offers retirement income products, while 19% said the plan did not have income products and 33% were unsure. Among workers with a plan offering a retirement income product, 89% said they are likely to use the product when they retire, with assets remaining in the plan post-retirement.

The Schroders research found that the five features retirement plan participants want from an in-plan retirement income solution are:

  • Lifetime income (52%);
  • Consistent monthly paycheck-like income (49%);
  • Low fees/cost (42%);
  • Liquidity/Access to money whenever they want (40%); and
  • Protection from market corrections/down markets (39%).

Almost half (49%) of all retiree respondents have no strategy to generate retirement income and plan to withdraw money as needed, the survey found.

Schroders research also shows that 23% of workers nearing retirement don’t know how much money they will need to generate in retirement to live comfortably, and 53% are concerned and 33% are terrified by the notion of regular employment checks ending upon employment separation. 

“More progress needs to be made to help defined contribution participants make the transition from saving to spending,” Schiffman said. “The SECURE Act was a crucial step toward putting retirement income front and center and made it easier for plan sponsors to introduce insured solutions into [defined contribution] plans. However, more needs to be done to educate participants on the importance of higher income replacement, and that comes from planning for retirement income early in their careers.”

The Schroders 2022 U.S. Retirement survey was conducted by 8 Acre Perspective among 1,000 U.S. investors nationwide age 45 to 75 from February 17 to February 28.

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