Financial Education Vital for Women
December 3, 2003
Women, especially those with lower incomes, are more likely than men to view their retirement realistically and alter their goals and savings behavior after attending financial education seminars, according to a study by the TIAA-CREF Institute.
- Nearly one-quarter of the women who had initially stated a desired retirement age of less than 60 raised this target after an informational seminar, with an average increase of four years.
- Relatively few men altered their expected retirement age, regardless of their initial stated goal.
- Thirty-five percent of women also changed their income target, as compared to 20 percent of men.
- Women participants were nearly four years younger than the men, had on average 4.5 fewer years of work experience, had less schooling and were more likely to be in non-academic positions.
- Annual earnings were 50 percent higher for males ($77,213) than for females ($51, 869).
- Lower earnings also produced lower balances in basic pension plans - $520,153 for men as compared to $197, 485 for women.
It is essential for women to plan for retirement because they tend to live longer and have an interrupted work history due to child-raising. Also, today's Social Security system will not have adequate funds to maintain current programs in the future.
Source: Robert Clark (North Carolina State University) et al., "Managing Retirement Accounts: Gender Differences in Response to Financial Education," September 2002, TIAA-CREF Institute.
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