Fewer Women Than Men Have Recovered Their Losses from the Downturn; Women Are Hesitant to Invest
NEW YORK – AXA Equitable Life Insurance Company released today results of a recent study, Retirement in America: A Survey of Concerns and Expectations, that show twice as many women than men say their top financial worry is not being able to save enough for retirement (22% versus 11% respectively). The recent financial crisis has had a profound effect, specifically on women, with fewer women than men recovering the majority of their retirement savings investments (28% versus 37% respectively).
An equal number of women and men (six in 10) think investing in equities is important for reaching their retirement goals, and even more women than men are “troubled” or “kept up at night” about inflation eroding their retirement savings (41% vs. 34% respectively). Yet today, 60 percent of women are not confident that investing in equities is a good idea, compared to 47 percent of men. Additionally, nearly 50 percent more women than men (62% vs. 42% respectively) lack confidence in their ability to invest in equities.
In the past 12 months, women were less likely than men to have made any changes to their investments in stocks – 60 percent of women did not make any changes to their stock investments in contrast to 49 percent of men. Men, however, were more likely to have increased their investment contributions – 25 percent of men have increased contributions to stocks, versus only 16 percent of women.
“The results show women are conflicted. They know they need to invest for growth potential so their savings can last for 20 to 30 years of retirement, yet they lack confidence in their ability to invest so they aren’t doing anything,” said Barbara Goodstein, executive vice president and chief innovation officer for AXA Equitable. “Not taking any action, however, could put them at greater risk.”
Women Want Guarantees
Women are very clear when it comes to what they want in a retirement product – they want guarantees. The study found:
- 89 percent of women think it’s “extremely or very important” for a retirement product to protect the principal of their investments, and 85 percent think it’s extremely or very important for a product to protect their investments, even when the stock market goes down.
- 81 percent of women want a product that provides guaranteed income for life regardless of market performance.
“Investing involves risk, but some retirement products do allow for upside potential along with asset protection and guaranteed income for life,” said Jamie Shepherdson, president of Retirement Savings for AXA Equitable. “Since the market crash, new products have been designed to meet the increased demand for protection. These new products give consumers the opportunity to invest for growth but also to provide reliable retirement income. Our industry needs to do a better job of letting consumers know these options exist.”
Working with a Financial Professional Makes a Difference
The percentage of women working with a financial professional has increased significantly. Among the majority of women surveyed (aged 35 to 70), 58 percent have a primary financial professional, up 17 percent from just a year ago. These relationships are making a difference. Women who use financial professionals fared better during the crisis and are more focused on their finances. Notable results include:
- 41 percent of all women with financial professionals report recovering some of their losses, in contrast to just 28 percent of women without financial professionals.
- In the past year, 62 percent of women with financial professionals have reduced their discretionary spending, versus about half (51%) of those without financial professionals.
- One in five (21%) women without financial professionals have cancelled their individually-purchased life insurance in the past year, versus only nine percent of women with financial professionals.
Women working with financial professionals are also more aware of future risks to their retirement income, including inflation and the potential for rising taxes. Sixty-four percent of women working with financial professionals believe inflation rates will rise in the coming year, versus just over half (54%) of those without financial professionals. And, while 92 percent of women with financial professionals predict taxes will be higher in three years, only 79 percent of women without financial professionals agree.
"We’ve seen a dramatic increase in the number of women working with financial professionals over the past year and, as the results indicate, these women faired better during the crisis than those who chose to go it alone,” said Andrew McMahon, president of Financial Protection and Wealth Management for AXA Equitable. “This demonstrates the value of seeking professional financial guidance, not only to navigate through turbulent times, but also to develop comprehensive financial strategies that help individuals prioritize their long-term objectives and stay the course, regardless of the ups and downs of the market."
Younger Generations Learning from the Trials of Baby Boom Women
The number one financial concern among the younger generations of women is not having adequate sources of guaranteed income for life – 87 percent of Gen Y (aged 25 to 29) and 92 percent of Gen X (aged 30 to 44) are worried. Additionally, Gen Y and Gen X women are already prepared to delay retirement. They expect to retire seven years later than they did before the market downturn, reporting their planned retirement age is now 68, versus 61 years old prior to the market downturn.
As a result of the market downturn, about half (49%) of all Baby Boom women have decided to delay retirement. Additionally, nearly four in 10 (39%) Older Baby Boom women (aged 55 to 64) have gone back to work after retiring, while Younger Baby Boom women (aged 45 to 54) are the most likely to have taken a second job or to work longer hours (29% of Younger Baby Boom women versus 11% of Older Baby Boom women).
“The large percentage of younger women focused on retirement could be driven by the fact that many Baby Boom women are now struggling to achieve their retirement goals,” said Ms. Goodstein. “The data suggests that younger generations are learning from the trials Baby Boom women are going through when it comes to retirement preparation. We hope these lessons will encourage them to take control of their finances sooner.”
About the Survey
Retirement in America: A Survey of Concerns and Expectations, is part of AXA Equitable’s ongoing commitment to understanding the financial concerns of consumers and how market volatility has impacted their retirement planning. The study polled 1,000 mass affluent Americans between the ages of 25 and 70 (504 women and 496 men). The survey was conducted in December 2009, and respondents included financial decision-makers with household incomes of at least $75,000 or investable assets between $250,000 and $999,999.
Margin of error for the research is +/- 3 percent, at a 95 percent confidence level. Where necessary, results were weighted to represent overall characteristics of the mass affluent American public. In some cases, comparisons are made to similar studies conducted in February 2009, October 2008 and April 2008.
The study is not intended to be relied upon as a forecast or investment advice, and is not a recommendation, offer, inducement or solicitation to buy or sell any securities or to adopt any investment strategy. AXA Equitable undertakes no obligation to publicly update or revise any of these findings, whether to reflect new information, future events or circumstances, or otherwise.
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About AXA Equitable
In business since 1859, AXA Equitable Life Insurance Company (NY, NY) is a leading financial protection company and one of the nation’s premier providers of life insurance and annuity products, as well as investment products and services through its affiliates, including, AXA Advisors, LLC. The company’s products and services are distributed to individuals and business owners through its retail distribution channel, AXA Advisors and to the financial services market through its wholesale distribution channel, AXA Distributors, LLC.
AXA Equitable, a subsidiary of AXA Financial Inc., is part of the global AXA Group, a worldwide leader in financial protection strategies and wealth management. “AXA Group” refers to AXA, a French holding company for an international group of insurance and financial services companies together with its direct and indirect consolidated subsidiaries. For more information, visit www.axa-equitable.com.
GE 55824 05/30/2010