Benefits May 6, 2008

Women Starting Retirement Planning Early

May 6, 2008 (PLANSPONSOR.com) - Whether they're Millennials, GenXers, Boomers or Matures, American women are actively considering their future retirement and financial security, according to a survey.
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A news release from Prudential Financial said 36% of Millennials (ages 25-29) and 34% of GenXers (ages 30-42) say they are already pondering their retirement nest egg. Retirement is also a top-of-mind consideration for 28% of Boomer women (ages 43-61) who participated in the study.

“The good news is that educational messages related to women ‘ s financial security appear to be resonating, “ said Christine Marcks, President of Prudential Retirement, in the announcement. “ But 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. “

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About eight in 10 survey respondents said they believe maintaining their lifestyle in retirement is a priority, yet few are very confident they can achieve it. A 62-point gap exists between women ‘ s confidence levels and the importance they place on this goal, the announcement said.

The poll found women rely on a trusted network for information and advice and actively seek counsel with more than half naming a financial adviser (34%) or friends and family (19%) as their most preferred sources for learning about financial products. Across the generations, an overwhelming 80% of Millennials show the most propensity for relying on friends and family for guidance, yet the Internet is equally important (79%).

In fact, the difference in using the Internet as a top resource for financial planning information is quite extreme across the generations: It drops to 67% among GenXers and then to less than half among Boomers (46%) and Matures (45%).

Although women across generations demonstrated a firm grasp of insurance products (29%) and workplace retirement plans (28%), a steady drop in understanding of mutual funds (15%), long-term care insurance (13%), and annuities (10%) occurred in relation to age – except among Matures (women ages 62+) whom Prudential said demonstrated more knowledge across the board.

According to the announcement, other highlights of the October 17 to 25, 2007, survey include:

  • One in five Boomers, GenXers, and Millennials feel " very well prepared, " for retirement compared to two in five Matures. In reporting their expected sources of retirement income, roughly two-thirds of women indicated their own personal savings over government support and/or a systematic workplace savings plan. Not surprisingly, only 35% of Millennials expect to rely on Social Security versus 91% of Matures.
  • Forty percent of women who claimed to be " ahead " in their retirement feel very well-prepared to make important financial decisions compared to 7% of those who said they are " very behind. "Ninety percent of women who consider themselves " very confident " are ahead of schedule or on track with their savings, compared to only 4% of those who said they are not confident.
  • Seventy-two percent of women admitted that procrastination affects their own personal experience. One-third of women cited family demands as the number one factor contributing to their delays in planning and saving for retirement and one in five said they put off financial planning and saving because they do not make enough money.

Prudential Financial ' s 2008 Study on The Financial Experience and Behaviors Among Women polled 1,033 American women about their financial knowledge, actions taken, and confidence in attaining their financial goals.

The study is available here .

Benefits May 5, 2008

Survey Finds Many Women Underinsured

May 5, 2008 (PLANSPONSOR.com) - Many working moms underemphasize their own financial picture, including insurance and annual earnings, and focus on their spouse's financial contribution to the family.
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A survey sponsored by The Hartford Group, an insurance provider, found that two-thirds of moms say it is “extremely” or “very important” for their spouse or partner to have disability insurance, compared with only half who say it is “extremely” or “very important” to have coverage themselves. A news release said the poll found less than half of mothers (47%) who work outside the home have short-term disability insurance and even fewer (37%) have long-term disability coverage.

Another possible reason for mothers’ lack of disability coverage is that many are unaware of their vulnerability and what conditions constitute a disability, the release said. Only 24% of mothers surveyed say they completely understand disability insurance. Sixty-one percent of moms surveyed think accidents or injuries are the leading cause of short-term disability.

“The burden on mothers today is enormous, including contributing half and in some cases, all of the household income. Yet, many are not taking an important step to safeguard their family finances,” said Laura Marzi, assistant vice president in The Hartford’s Group Benefits Division, in the news release.

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The Hartford suggested one possible reason mothers perceive a less critical need for income protection is that they often draw smaller salaries than their spouse. In The Hartford’s survey, nearly half of moms polled say they earn under $50,000 per year, with 64% of single mothers earning $25,000 to $50,000 annually. In comparison, a majority of fathers (54%) surveyed draw an annual income of $50,000 to $100,000.

Marzi noted that 97% of mothers surveyed report they would have to change their lifestyle if they lost part of their family’s income for three to six months. In addition, only 6% of moms say that they have saved enough to live off their savings in case they become disabled.

For The Hartford’s survey, independent market research agency Opinauri, Inc., conducted an online survey polling 971 U.S. adults, aged 18-64, in February 2008.

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