When planning for retirement, women are more affected by emotions and less involved in decision-making, compared to their male counterparts, according to a study by Lincoln Financial Group.

While hope and fear affect both genders when it comes to retirement saving and investing, women are more vulnerable to such emotional influencers.

Seventy-three percent of the women polled by Lincoln said they are affected by fear, compared with 59% of male respondents. Hope plays a role for 91% of women and 85% of men.

When it comes to intellectual influencers, the situation is reversed. The report reveals that 82% of women are influenced by hard facts, compared with 90% of men. Previous experience is a factor for 72% of women and 78% of men.

Read: Retirement confidence on the rise

The report also shows that while most respondents avoid taking charge of their retirement plans, this trend is more prevalent for women (39%) than it is for men (32%).

This affects women’s investment style. Fifty-six percent of women are likely to invest in stocks or mutual funds compared to 73% of men. And women (48%) are more likely to invest in money market funds than men (43%).

In polling participants, Lincoln also found that women are less engaged in the management of their plans. Only 27% of female respondents said they’re engaged, compared with 37% of men.

That lower engagement level could be the result of relying on a partner. Among those who are married or living with partners, 35% of women are the primary decision-maker when it comes to saving, compared with 53% of their male counterparts.

But the study cautions that these numbers may not show the real picture because “some women think they’re sharing the decision-making, but their partners claim to be in charge.”

Read: Late boomers, generation X less prepared for retirement

So what should plan sponsors do to eliminate all of these barriers for women? Lincoln recommends that because emotion affects the female investment approach more strongly, sponsors should be “empathetic to investment-related fears and concerns, while helping turn hopes into specific investment goals.”

The report also advises plan providers to introduce high-quality, one-on-one personal communication with female plan members since interpersonal connections play a key role in women’s lives.

“Women may want to feel they have a personal relationship with their retirement plan, their employer and their provider,” the survey recommends, adding that if sponsors and advisors cannot provide face-to-face interaction, they can connect with women on social media.

Avoiding a large number of technical details during communication and providing straightforward choices is another recommendation based on the fact that most plan members—both men and women—do not have the financial literacy of a portfolio manager.

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Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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This isn’t surprising; however, it is concerning. Women have always been found to be “more emotional” than men, but planning for retirement is something they cannot afford to avoid. Women make up 70% of all long term care claims and live an average of 5 years longer than men. Nursing homes cost an average of $85,000 a year, and most people cannot afford to pay that out of pocket. This makes it crucial for women to begin planning for their long-term care needs in order to secure their financial future and enjoy retirement stress-free.

Monday, July 08 at 12:12 pm | Reply

Priscilla Healy:

I am not sure why prudence in women should be characterized as fear, and therefore to be criticized, while male risk-taking is not characterized as dangerous over-confidence.

And yes, women do depend too much on their male partners for financial advice.

As for me, I simply do not believe that women pay less attention to hard facts than men. What the Lincoln Financial Group study shows is that financial education for both genders is increasingly important as life expectancies and the need for saving increase.

Monday, July 08 at 2:06 pm | Reply

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