By Catey Hill
Nearly 40% of married women rely on their spouse or significant other to plan their retirement, according to a new study by ING Direct USA and women’s financial site DailyWorth.com, while just 27% do it themselves. These findings are similar to those in a Wells Fargo study from February 2011, which found that only 35% of women say they are the primary financial decision-maker in their household, compared to 55% of men.
No doubt more married women are involved in retirement planning than they were, say, 50 years ago, but it still raises the question: Why do many women hand over their retirement planning to their husbands? We asked some experts their thoughts on the topic.
Some women simply do not feel confident in their ability to plan for retirement and so they hand over responsibility, says Binney Wietlisbach, president of Haverford Trust. In fact, nearly eight in 10 women surveyed by ING said they lacked the financial savvy to plan for retirement or still have much to learn about it. And according to a recent study from Mass Mutual, just one in three women say they know how much income they will need in retirement, whereas 44% of men do.
Women may also see retirement planning as a man’s traditional role. For the two out of three women who identify themselves as “traditional,” rather than “modern,” according to the ING survey, this division of labor may seem natural thing, says Cathy MacFarlane, the head of corporate relations for ING.
But at least one critic says the financial services industry plays a role by failing to fully engage women. Much of the language of retirement planning advice and the way the messages are targeted may play a role, says Manisha Thakor, a CFA and the founder of the Women’s Financial Literacy Institute. “The vast majority of financial services ads I see focus on ‘the big win’ and are in evidence in male-oriented TV shows, magazines, and journals,” she says. “And when I do see financial ads placed in events / publications that appeal more towards women, I find that they don’t tend to address the root concerns of most women … security, protection, and preparing for longevity risk.”
Whatever the reason, this is for sure: Even financially savvy husbands may make mistakes or neglect the ways that women may need to plan differently for retirement than men, such as factoring in a longer lifespan. (Read more about the impact of gender on retirement savings here.) That’s why if your spouse is taking the reins of your retirement planning, at least ask a lot of questions. “You should be part of the [retirement planning] discussion,” says Wietlisbach