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More women report feeling confident about their retirement than in the past two years according to new findings from the 2012
New Retirement Mindscape® City Pulse index by Ameriprise Financial (NYSE: AMP). One in four women (24%) report feeling very confident they’ll reach their retirement goals and another 44% report feeling somewhat confident. Only 20 percent say they feel worried when they think about their retirement – down significantly from 25% last year. Despite this trend, the fewest number of women since the index began in 2010 report making any kind of financial preparations for this milestone (66%).
“It’s great to see that women are feeling more confident about their financial future,” said Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial. “These positive sentiments may be attributed to any number of factors, but unless these women’s feelings materialize into real financial preparation, they’re not necessarily an indicator of how ready women are for retirement.”
While women are as confident as men, they have some catching up to do when it comes to financial preparation. Only 44% of female respondents say they’ve contributed to a workplace retirement plan, compared to 51% of males. Ten percent fewer women than men have set aside funds in their own investments (42% vs. 52%) and only one in five (19%) have determined the amount of income they’ll need in retirement compared to 28% of males.
This lack of financial planning is especially concerning because many women face unique challenges in preparing for retirement like lower earning power and more time spent out of the workforce to be a caregiver. Women also neglect to express more concern than men about the obstacles they may face in retirement. For example, one of the most prominent of these hurdles for women is longevity – on average, women outlive men. The average life expectancy for American women is about 80 years (compared to 75 years for men), yet 24% of women underestimate the years they’ll need to tap into their retirement funds, saying that they plan to live from their savings for only ten years or less. Also, only half (48%) of women admit they’re concerned they’ll outlive their retirement savings.