Women lag in saving for retirement Barriers found in low pay, lack of financial training

February 24, 1993|By Newsday

Despite the best efforts of women to save for retirement, new study says they save less than men because they are stymied by low salaries, a lack of access to pension plans and little financial training.

According to a soon-to-be released national survey sponsored by Phoenix Home Life Mutual Insurance Co., women say they were unable to save as much money in 1992 as they did in previous years. This erosion in savings power comes at a time when financial companies and other organizations are stepping up efforts to better educate women about money management.

The survey of 1,500 adults between 30 and 50, with household incomes of $30,000 and above, found that the median annual savings for men last year was $3,000, compared with $2,100 for women.

"The findings are very disturbing, especially in light of the fact that most impoverished elderly people are women," says Lorraine Padilla, manager of Phoenix Home Life agency in Uniondale, N.Y.

This is not an indication that women are less adept than men at financial matters, experts say. Rather, women have less money to save, and they often lack a basic financial education.

"Men are always taught that they will be responsible for finances," says Ann Diamond, a financial consultant in New York City. "Women did not get that message growing up, and they are often intimidated by the subject. They think they are supposed to know about it and so they are often afraid to ask questions."

A particularly worrisome trend, Ms. Padilla says, is the dramatic decline in the proportion of women taking advantage of employer-sponsored retirement savings programs. Last year -- the third year for the survey -- 45 percent of the female respondents said they contributed to such programs, compared with 60 percent in 1991.

What's more, 34 percent of the female respondents, most of whom are in the work force, did not know how much money they save each year, compared with 20 percent of the men, according to the survey, which was conducted by Yankelovich Partners.

In recent years, there has been a surge in financial seminars aimed at women. For the past four years, Ms. Diamond has offered free seminars, called Money Matters for Women, which are sponsored by Citibank MasterCard and Visa. She says interest in the seminars has increased recently. Last evening, 500 women attended a seminar at the Grand Hyatt Hotel in Manhattan -- filling the room to capacity.

"Women must be especially astute financial planners to meet future expenses," says Dona Young, senior vice president and general counsel of Phoenix Home Life. "If they are not, they will find themselves in a crisis when they're called upon to pay college tuition, support parents and prepare for retirement at the same time."

Although many of the women surveyed said they do not have access to company pension plans, they also said they feel it is important to have their own retirement plan to be financially independent in case of divorce or the death of their husband.

Sara Rix, a senior analyst at the American Association of Retired Persons, says women would be smart to focus on these issues at an early age.

"On average the life expectancy of women is considerably longer and they are more likely to end up in old age unmarried. And when a woman becomes widowed or divorced the chances of falling into poverty greatly increase," she says.

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