Study finds retirement confidence gap between men and women

By Doug Bailey

A Nationwide Retirement Institute survey of retirement plan participants reveals a wide gap between men and women in their confidence of their respective financial futures.

Inflation, mostly, has unnerved women to a greater degree than men when it comes to retirement planning, the survey found. According to the study, 62% of women either expect to retire later than originally planned, or don’t believe they will ever be able to retire because of inflation, compared to just 47% of men.

This is a significant jump from the 2021 survey results that showed only one in four women – or 25% – expected to postpone or cancel retirement due to the COVID-19 pandemic.

Why the change?

“We see this trend showing up in other surveys, not just related to retirement,” said Amelia Dunlap, vice president of Retirement Solutions Marketing for Nationwide. “I think women are more likely to feel less prepared because of the time they might have been out of the job market and not contributing to a retirement plan.”

Social component cited

There’s also perhaps a social component in which women may have a more realistic view of future finances and may be more cautious about what’s going to be required than do men, Dunlap said.

“There’s psychological and social differences” she said. “We find, for example, that women are less likely to apply for a job unless they’re 100% confident that they’ll get it, whereas men would apply even if they’re only 50% confident.”

But a more practical reason for the difference is the fact that women statistically live longer than men so they’re more likely to have a need for retirement benefits for a longer period of time.

“In our changing society, we continue to see women taking on more and more of the financial responsibilities, whether for their family or just for themselves personally,” Dunlap said.

“...We continue to see women taking on more and more of the financial responsibilities, whether for their family or just for themselves personally."Amelia Dunlap, VP, Nationwide Retirement Solutions Marketing

Having to help loved ones manage rising expenses is also contributing to women delaying their retirement, the survey found. More than one in 10 women who are expecting to delay or cancel their retirement say they are doing so because they had or have to financially support a family member or friend as a result of inflation.

More than half (56%) of the women surveyed worry when thinking about where they are at with their current retirement plan and financial investments, a 22-percentage point uptick from 2021. And 57% of those who are delaying or cancelling their retirement due to inflation say it has negatively impacted their mental health, versus 48% of men.

Challenges 'difficult to navigate'

“I know it can be difficult to navigate the short-term challenges we’re facing with market volatility and rates of inflation,” Dunlap said. “It’s critical that plan sponsors help their employees keep focused on the longer-term view, avoid emotional investing or reactions, and offer solutions that will help them stay on track for their goals.”

Women also struggle to optimize their income in retirement, the Nationwide survey found, mostly because few are familiar with the basics of retirement planning. However, women are more interested in finding solutions that can help them navigate through the retirement weeds. Almost all of female plan participants say they would be at least somewhat likely to rollover a part or all of their current retirement plan savings into a guaranteed lifetime income investment option if they were able to, compared to 83% of men.

Dunlap said she was surprised at some of the result of this year’s survey, having believed the 2021 results were an anomaly caused by the COVID-19 pandemic.

“I really thought we’d see things getting back to normal levels of confidence and anxiety,” she said. “But then came rising inflation rates that might have contributed even more to concerns about finances.”

Edelman Data and Intelligence conducted the online survey for Nationwide from July 14 to August 5, 2022. Respondents included: 500 company plan sponsors and decision makers; 100 public sector plan sponsors; 1,000 plan participants aged 45 and up; and 100 plan participants aged 35 to 44 years old.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].