The Confidence Divide

The Retirement Income Gender-Gap

Women expect to run out of money five years too soon in retirement

MassMutual publishes white paper to outline issues, suggest solutions and offer resources for financial advisors to help women overcome hurdles

SPRINGFIELD, Mass., Aug. 2, 2018 – Women run a higher risk than men of being impoverished in old age as women retirees and pre-retirees on average expect to run out of money five years too soon in retirement, according to a new study from Massachusetts Mutual Life Insurance Co. (MassMutual).

“The difficulty that many women face in preparing for retirement leads many to anticipate living less comfortably in retirement and running out of money five years too soon, a stunning development from a retirement-planning perspective,” said Teresa Hassara, Head of MassMutual’s Workplace Solutions. “The one positive note is that women express greater openness to financial education and getting professional financial advice, both of which present opportunities for financial advisors to help women avoid the prospect of poverty in old age.”

MassMutual is publishing a white paper, “Closing the Retirement Gender Gap: What Your Clients Need to Know About Women and Investing” that outlines the issues women face, offers resources and suggests solutions for advisors. The white paper reports MassMutual’s research findings and suggests ways advisors can help women better prepare for retirement. An earlier white paper, “Out of Sync: What plan sponsors need to know about retirement readiness,” focused on retirement issues faced by people of all ages and genders.

Income Shortfall

On average, women retirees and pre-retirees expect to spend 25 years in retirement compared to men who expect to live 23 years in retirement, MassMutual’s Women’s Retirement Risk Study finds. However, women expect their income will only last 20 years – falling five years short – compared to men who anticipate their income will last 25 years, providing a two-year cushion. On average, retired women anticipate living 30 years in retirement while pre-retiree women expect to live only 21 years, according to the study.

Women are less likely than men to accurately project how long their savings will last in retirement, according to the study. Nearly half of women (43 percent) are unsure of how long their savings will last compared to one third of men. Notably, the difference is driven by the 46 percent of pre-retirement women who say they don’t know how long their income will last.

The Confidence Divide

Overall, the study points to several reasons why women anticipate a more difficult time financially than men when it comes to retirement. Those include being less confident about managing savings and investments, optimizing Social Security, replacing a higher percentage of their pre-retirement income, and taking investment risk.

“There are many barriers that make it more challenging for women to prepare to retire, a reality that we need to overcome if women are to enjoy a secure retirement,” Hassara said. “MassMutual’s study shows that many women are less comfortable with financial issues and money in general, so it’s critical for them to have access to more education, professional financial advice, planning tools and other resources to meet these challenges head on.”

According to the study, 79 percent of retired women are receiving professional financial advice, compared to only 68 percent of men.

Income Replacement
Only about a third of both men and women say they will need to replace at least 75 percent of their pre-retirement income when they retire, the study shows, with 41 percent of men and 45 percent of women saying that will only need 50 percent or less. Retired women are more likely than retired men to say they need to replace less than half of their pre-retirement income to live comfortably (40 percent vs. 28 percent).

MassMutual’s benchmark for retirement preparedness is the ability for retirees to replace 75 percent of their pre-retirement income from all sources, including retirement savings, Social Security and a pension, if available.

Retirement Savings Risk
Women tend to be more concerned about market volatility and mismanaging their investments than men, the study finds. Pre-retirees are more likely to worry than retirees.

While nearly all women say they want their investments to grow during retirement (97 percent), women are less comfortable with investment risk and tend to believe they should become considerably more conservative in retirement than their male counterparts, according to the study. Women who work with a financial advisor (71 percent) are more likely to say their advisor recommended that they invest more aggressively.

Out of Sync
MassMutual’s white paper reviews many of the key hurdles women face in preparing for retirement, including the gender wage gap, having less time to save because of career breaks to care for children and others, and longer lifespans that contribute to women spending more time in retirement. The paper also outlines the greater aversion women often have to investment risk and therefore a lack of confidence with investment matters.

There are many barriers that make it more challenging for women to prepare to retire, a reality that we need to overcome if women are to enjoy a secure retirement

Meanwhile, women may be better investors than they think, the white paper concludes, given women’s propensity to save, stick with investments longer, willingness to ask for professional guidance, and open to professionally managed asset allocation strategies for retirement saving such as target date funds.

“Retirement plan providers and financial advisors need to connect with women and provide more education to help them become more comfortable with longer-term investment concepts such as taking smart risks, meeting income needs and how to balance growth and preservation,” Hassara said. “MassMutual is making a special point of reaching out to both advisors and women at the worksite to provide the tools and resources they need to be successful.”

There are many barriers that make it more challenging for women to prepare to retire, a reality that we need to overcome if women are to enjoy a secure retirement


Excerpts from theClosing the Retirement Gender Gap white paper

Women face headwinds in saving for retirement
Nearly half of American workers (47%) today are women.1 They are better educated than ever before and are more likely than men to have earned a bachelor’s degree by age 29.2 Yet women face vastly different outcomes than men when it comes to achieving financial wellness in retirement. As the following describes, women are impacted by circumstances that can make it challenging for them to achieve financial wellness for retirement.

  • Women continue to face a wage gap
    While women are making strides to achieve equal pay for equal work, they still are paid 92 cents for every dollar men earn, even when you take into account educational attainment, choice of major, and job tenure.3 A smaller monthly paycheck means that women have less to money to save; it also means they receive lower matching contributions from their employers.
  • Women have less time to save
    Women are more likely to take career breaks to start a family or provide unpaid care for loved ones.4 Time out of the workforce can have a detrimental effect on their career prospects. It can also impact their ability to sock away money for the future — and to qualify for higher Social Security benefits in retirement.
  • Women have longer retirements
    Women generally live longer than men (2.5 years longer, on average).5 They’re also are likely to live alone for a number of years later in life, without anyone to share expenses. This means that women often need a higher level of savings than men to achieve the same level of annual income throughout their entire retirement.


Risk aversion may be holding women back
Research has shown that men and women have different perspectives and values.7 For example women tend to be more altruistic, while men tend to be more competitive. While science digs deeper into the reasons for this, it’s not surprising that gender plays an important role in how women and men think about retirement, financial planning and managing investments.

Consider these findings from our survey:

  • Women are more concerned than men about stock market volatility in general (78% of women vs. 65% of men).
  • Nearly half of women (48%) are worried about taking on too much investment risk (vs. 41% of men) and 6 in 10 women (58%) are concerned about making a poor investment decision. Women’s discomfort with financial risk is reflected in their choice of investments.
  • Women are more likely than men to describe their current investment mix as a balance of growth and capital preservation (42% vs. 32%). In contrast, men are more apt to describe their current mix as tilted towards growth (58% vs. 46%).


Women lack confidence
Women have more success handling their money and finances than many give themselves credit for having. Whether it’s from a lack of financial education, a legacy of traditional gender roles, or simply their own perception that they have less experience with money than men, many women lack confidence when it comes to making decisions about their own retirement savings.

Our study found that:

  • Just 15% of women say that they are very knowledgeable about managing their savings and investments versus 32% of men.
  • Women are less likely than men to say that they will have enough money to meet their lifestyle goals (58% vs. 68%) or that their retirement income will last as long as they need it to (59% vs. 72%).
  • Women are less likely than men to accurately project how long their savings will last in retirement. On average, women expect to spend 25 years in retirement, but expect their income to last only 20 years.

Read the full report here.




About MassMutual
MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. MassMutual offers a wide range of financial products and services, including life insurance, disability income insurance, long term care insurance, annuities, retirement plans and other employee benefits. For more information, visit