Schwab Survey Finds Major Differences in How Male and Female Millennials View Retirement

Younger Women Worry More about Money than Health

Tuesday, November 15, 2016 6:00 am PST

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"It is important for women and men alike to have access to and take advantage of critical resources, such as professional 401(k) advice and financial wellness programs, to help close the gap in retirement savings confidence."

SAN FRANCISCO--(BUSINESS WIRE)--A recent survey from Schwab Retirement Plan Services, Inc. finds there are significant gaps between the way male and female Millennials approach planning and saving for retirement. Millennial men are close to evenly split on whether they are more concerned about being healthy enough or having enough money to enjoy retirement, while Millennial women are overwhelmingly more concerned with financial security once they stop working.

In the nationwide survey of people 25 to 35 years old who participate in a 401(k) plan, female Millennials report uncertainty and stress related to saving enough for a comfortable retirement in far greater numbers than their male counterparts. Both groups are interested in receiving personalized, professional help with their retirement savings efforts, though more women than men expressed a desire for such advice.

Being healthy or having enough money?

When asked which concerns them more – being healthy enough to enjoy retirement or having enough money to enjoy retirement – 54 percent of Millennial men and just 30 percent of Millennial women surveyed say being healthy is the greater concern. Forty-six percent of men and 70 percent of women, the overwhelming majority, say having enough money is the greater concern.

This is true even though male and female Millennials say they are in good shape, physically and financially, in virtually equal numbers. Eighty-six percent of Millennial men and 84 percent of Millennial women report being in good personal health, and 77 percent of Millennial men and 79 percent of Millennial women report being in good financial health.

Female Millennials’ concerns about having enough money in retirement are borne out in their anticipated age of retirement. Roughly a third (31%) of Millennial women think they will still be working at age 70, compared to 22 percent of Millennial men who feel the same way, suggesting these women are concerned they will need a few extra years of income to ensure a comfortable retirement.

“A variety of social and economic factors impact the way men and women view money, and our survey showed that this is already affecting the youngest generation of workers,” said Catherine Golladay, senior vice president of participant services and administration at Schwab Retirement Plan Services. “It is important for women and men alike to have access to and take advantage of critical resources, such as professional 401(k) advice and financial wellness programs, to help close the gap in retirement savings confidence.”

The Confidence Gap

According to the survey, there is a large disparity in confidence between Millennial men and women when they think about their own retirement preparedness. The data shows that more than half of Millennial men (55%) believe they are saving enough to retire when they want to, compared to 42 percent of women.

This divide can be explained in part by the uncertainty associated with 401(k) investing. Sixty-one percent of Millennial women and 44 percent of Millennial men surveyed feel they don’t know what their best 401(k) investment options are. Likewise, a full 75 percent of female Millennials and 59 percent of male Millennials wish they had an easier way to know how to choose their 401(k) investments.

Saving for retirement is causing this generation plenty of stress as well. For example:

  • Only 36 percent of Millennial women feel totally on top of their 401(k) investments, and 42 percent feel a lot of stress about choosing the right 401(k) investments.
  • For Millennial men, 55 percent feel totally on top of their 401(k) investments, and more than one-third (35%) feel 401(k) investing-related stress.

Help Wanted

Younger workers both male and female say they are relying on themselves for the money they’ll need in retirement (89% of both groups), and a 401(k) is the largest or only source of retirement savings for most (72% of men and 74% of women).

Recognizing the importance of this vehicle to their financial future, most Millennials say they want help from a professional in managing their 401(k) investments. Millennial women are even more favorable to personalized 401(k) advice than their male counterparts, 79 percent compared to 67 percent.

More Millennial women than men would also like help with specific aspects of retirement planning, like managing current expenses to save more money for retirement (45% of women and 25% of men) and calculating just how much money they’ll need to save for retirement (65% of women and 52% of men).

Professional 401(k) advice can also go a long way towards boosting Millennials’ retirement saving confidence, especially for young women:

  • Only a quarter (26%) of Millennial women feel very or extremely confident in their 401(k) investment decisions when working on their own, compared to 57 percent of Millennial men.
  • With the help of a financial professional, the gap essentially disappears: 76 percent of men and 75 percent of women would feel very or extremely confident with the aid of investment advice.

The survey also showed that Millennials would welcome employer-provided education, tools and resources to help with their overall financial health. The vast majority – 87 percent of male and 92 percent of female Millennials – say they are interested in using a financial wellness program at work.

“Our experience has shown that taking advantage of professional advice can help 401(k) participants save more, be more diversified and stay the course during times of market volatility,” Golladay added. “Millennials have the benefit of time on their side, so the earlier they consult with a professional and formulate a savings plan, the better they can prepare for retirement.”

About the Survey

This online survey of U.S. 401(k) participants was conducted by Koski Research for Schwab Retirement Plan Services, Inc. Koski Research is neither affiliated with, nor employed by, Schwab Retirement Plan Services, Inc. The survey is based on 288 interviews and has a 3 percent margin of error at the 95 percent confidence level. Survey respondents worked for companies with at least 25 employees, were current contributors to their 401(k) plans and were 25-35 years old. Survey respondents were not asked to indicate whether they had 401(k) accounts with Schwab Retirement Plan Services, Inc. All data is self-reported by study participants and is not verified or validated. Respondents participated in the study between June 2 and June 8, 2016.

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.

Financial tools and resources are available at www.schwabmoneywise.com.

Disclosures

Through its operating subsidiaries, The Charles Schwab Corporation (NYSE: SCHW) provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; compliance and trade monitoring solutions; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.schwab.com and www.aboutschwab.com.

The Charles Schwab Corporation provides services to retirement and other benefit plans and participants through its separate but affiliated companies and subsidiaries: Charles Schwab Bank; Charles Schwab & Co., Inc.; and Schwab Retirement Plan Services, Inc. Trust, custody, and deposit products and services are available through Charles Schwab Bank. Schwab Retirement Plan Services, Inc. is not a fiduciary to retirement plans or participants and only provides recordkeeping and related services. (1116-NW0D)

Schwab MoneyWise® is provided by Charles Schwab & Co., Inc.

©2016 Schwab Retirement Plan Services, Inc. All rights reserved.

Contact:

Charles Schwab
Mike Peterson, 330-908-4334
mike.peterson@schwab.com
or
Intermarket Communications
Jade Faugno, 212-754-5425
jfaugno@intermarket.com

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Catherine Golladay, senior vice president of participant services and administration, Schwab Retirement Plan Services (Photo: Business Wire)
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