Gender Gap Closing in Retirement Savings: Survey
Women are catching up with men when it comes to what they have saved up in their retirement plans and the rate at which they’re setting money aside.
According to fourth quarter 2012 data for defined contribution plans administered by MassMutual, the average deferral rate for women participants was 5.38%, an increase of 1.6% for the quarter. Men deferred an average of 5.81%, which was an increase of 1.2% from the third quarter of 2012.
According to MassMutual, the gap between what men and women save is gradually and consistently closing. Since the third quarter of 2010, when the average account balance among women participants trailed that of men by 40.49%, the gap has been gradually closing. During the fourth quarter last year, the average account balance among women was 38.25% behind their male counterparts, an improvement of 2.49 percentage points, or 5.6%.
"This is a positive trend and we are so pleased to see slow but steady progress for our participants, especially our female participants," says Elaine Sarsynski, executive vice president of MassMutual's Retirement Services Division and chairman, president and CEO of MassMutual International.
"We have customized our participant education offering on a number of fronts to drive action among specific segments such as women, and the progress we are seeing indicates that participants are responding favorably," Sarsynski said.
The vast majority (73%) of asset allocation investments for females are in age-based strategies, while men are almost evenly divided between age-based and risk-based strategies, at 52% vs. 48% respectively.
Loan activity among MassMutual's participants is well below the industry average, indicating the company's call center representatives and educational programs are successfully communicating that taking a loan from a retirement vehicle should be a last resort. The percentage of participants in plans administered by MassMutual taking any kind of loan or withdrawal is the lowest of any 4th quarter in the past five years.
Average balances and average deferral rates are highest for the Silent Generation (born 1945 and earlier) and Baby Boomers (born 1946 – 1964). Combined, Generation Y and Generation X participants (born between 1965 and 1995) represent 56% of total participants and 32% of defined contribution assets.
While GenX/Gen Y participant numbers are higher than the Baby Boomer count at 40% of participants, Boomers still have a greater share of the overall assets at 61%, but that gap, too, is closing.
This article was originally posted at BenefitsPro.com, a sister site of Credit Union Times.