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b"Adapted from the article on cnbc.com: \\u201cWomen Save More Than Men Before Retirement\\u201d\\xa0by Sarah O'Brien
Let me ask you this: Between men and women, who do you think knows more about finance, stocks, bonds, ETFs, and other investment securities? Go ahead and take a second, think about it, and pick an answer\\u2014men or women?
In most American households (including yours), who makes most or all of the decisions related to retirement savings and investments\\u2014the man or the woman??
I wish I could see you all and ask for a show of hands on the answers, but this is radio, so I\\u2019ll just cut to the chase. It turns out that women rule the roost when it comes to saving for retirement. And recent research by Vanguard shows that women are the ones signing up for 401(k) plans and saving a larger piece of their salaries compared to their male counterparts. Surprised? I\\u2019m sure some of you are!
Data from the Vanguard Center for Retirement Research shows that women save more than men before retirement, yet men have more wealth because they typically earn more. The study found that women are 14 percent more likely to voluntarily take advantage of pre-tax retirement savings accounts than men and save anywhere from 7 percent to 16 percent more than men, depending on income level.
The average retirement account balance across all income levels for women was $79,572 vs. $123,262 for men, but that imbalance is skewed by large differences at the high-income range, which is mostly comprised of men. But when you look at the under-$100,000 crowd, men don't beat out women's account balances.
Additionally, although women generally get a bad rap for being more risk-averse than men, the Vanguard study shows that both genders allocate about the same amount of their retirement money to stocks and index funds.
The study also found that more women (42 percent) than men (36 percent) use professionally managed portfolio allocations, such as target-date funds. In other words, men are more likely to cobble together their own portfolio than choose a target-date fund or similar option that would put their allocation of stocks and bonds in the hands of someone else.
Similarly, many financial advisors observe that men are less likely to be long-term planners or to seek out a financial pro for help.\\xa0 Compare that to the stereotype that men won't ask for directions if they are lost but women will, and the same applies when it comes to asking for financial advice. Men seem to think they should know everything that's going on in the financial world, but we need to break that mindset.\\xa0 So all my male listeners, going forward, please don't be embarrassed to ask for advice. It\\u2019s not a sign of weakness; it\\u2019s actually a sign that you\\u2019re smart.
Women tend to plan much more for the long term and are on the right track from the very beginning. But with men, it\\u2019s only when there\\u2019s an immediate need\\u2014like if they are close to retirement\\u2014that they usually seek advice.
But it\\u2019s not all bad news for men. A study from the Global Financial Literacy Excellence Center showed that while both men and women \\xa0scored poorly on a three-question financial literacy quiz, men did better. Just 22 percent of the women surveyed for the study answered all three questions correctly, compared with 38 percent of men acing the quiz. But men were more confident about their financial knowledge than they should be. And even when they were wrong, they reported being \\u201cvery confident\\u201d about their answers. Women, in contrast, were more likely to admit when they were unsure of the answer.
In other words, women, generally speaking, can ask for directions when they're lost and, it appears, also ask for financial advice. (As an aside, I have to admit that I hate asking for directions but force myself to do it anyway..."