Key gender differences exist affecting outlook, investing and spending

From BlackRock’s “To Spend or not to Spend?” white paper on spending retirement assets

Women and men see and experience retirement planning differently. Those providing advice and designing tools and solutions should educate themselves on the differences and retirees should be aware of their own gender biases that might affect how they make decisions.

Retired women face higher financial anxiety compared to retired men.

In regard to retirement finances, women are more sensitive and fearful than men. Fewer women (57%) than men (65%) say they rarely feel financially vulnerable. Additionally, compared to men, women find financial setbacks including running low on assets (42% vs. 32%) and a major investment loss (34% vs. 24%) more difficult to cope with emotionally. At the time of death, women are more likely to expect their assets to have decreased (68% vs. 61%), while men are more likely to expect their asset level to have increased (31% vs. 22%).

Retired women are more risk averse than retired men, which is reflected in their investment choices.

Nearly three in ten men (28%) are comfortable with substantial investment risk but fewer than one in six women (15%) say the same. Perhaps due to the differences in risk tolerance, men and women allocate their investments differently. Men are prone to allocate more of their assets to stocks while women are more likely to invest in asset allocation mutual funds and annuities.

Maintaining account balances is more important to retired women than men.

For women, ensuring that their assets remain at a certain level appears to be more important than to men. Women are more inclined than men to consider it important that their account balance does not dip below a certain level (58% vs. 49%) and that the amount of money they have increases (45% vs. 39%). Additionally, if they suffered a financial loss, women are more likely than men to try to build their assets back up (56% vs. 48%).

Kelly Johannessen