Retirement should be an enjoyable phase of life, but many women have financial anxiety attached to this milestone. A new GOBankingRates survey found that more than 1 in 3 women (38%) fears that she has not saved enough money for retirement and that she will outlive her savings. Meanwhile, only 28% of men have this same fear.
In this “Financially Savvy Female” column, we’re chatting with Samantha Garcia, a wealth advisor at Halbert Hargrove, about why women are more fearful of running out of money in retirement than men, and how women can ensure they do have enough saved to live well into their golden years.
By: Gabrielle Olya, GoBankingRates featuring Samantha Garcia, CFP®, AIF®, CDFA®, Wealth Advisor at Halbert Hargrove
Why Women Are More Fearful of Outliving Their Retirement Savings
There are a number of factors — both psychological and mathematical — that explain why women fear they will run out of retirement savings. Garcia outlined a few main reasons why more women have this fear than men.
Women Expect To Live Longer
The longer you live, the more money you will need in retirement, so generally speaking, women will need more money to fund their retirement than men do.
“With the women I work with, especially [those in] married couples, women expect to outlive their husbands,” Garcia said. “Even single women [have this fear]. The lifespan expectancy is higher, so if you’re going to live longer, are you sure that your money is going to make it work for the long term?”
Women Are More Risk Averse
Although women need more money to retire, they typically have less saved than their male counterparts. One reason is how women utilize the money they are putting aside for the future.
“Typically, women are more risk-averse than men are. And so even if they’re saving for retirement, are they saving it or are they investing it? Because there is a difference,” Garcia said.
“Men are typically more aggressive in terms of their investments,” she continued. “Women tend to be more conservative. So if you have a woman who is saving the same amount of dollars as a man, if she’s only earning interest on that, or if it’s in a portfolio that’s only earning 3% or 4%, and you have a man earning 6% or 7% on average, those balances are going to be significantly different, event over 10 years.”