Gender Matters When It Comes to Retirement

By Dave Carpenter, AP Personal Finance Writer

CHICAGO (AP) — If men are from Mars and women are from Venus, how on Earth can couples be in sync on planning and saving for retirement?

It's not always easy.

Men and women tend to have different approaches toward money and planning for retirement. While generalities don't apply to everyone, it's widely acknowledged that men take more investing risks and women don't react to market swings as much, among other tendencies.

Recognizing those differences and their long-term consequences is particularly important for couples who are planning their retirement and may find themselves in stark disagreements with their spouse.

"It's not a matter of one gender being right and the other wrong," says John Ameriks, head of investment counseling and research for The Vanguard Group. "You just need to be aware of the differences when you're making investing decisions."

In a bull market, he notes, women might be criticized for not taking enough risk, but in a bear market men can drag portfolios down by having gambled too much with their stocks. Investors should try to think more about their own biased tendencies — by gender and otherwise — and perhaps take a cue from their partner's better instincts in some cases.

Here are some of the biggest perceived differences between the sexes on their financial approach to retirement, as well as suggestions for how to compensate for them:

— Men tend to be overconfident about their investing and retirement planning skills.

Two studies in recent months provide the latest evidence that men have more confidence, often to a fault.

Men were much more likely than women to sell their shares at stock-market lows during the financial crisis of 2008-09, based on a study by Vanguard of 2.7 million customers with individual retirement accounts. That was decisive but costly, given the market's dramatic rally as soon as the bottom was reached 14 months ago. In the next four months alone, the Standard & Poor's 500 index rose 30%.

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