Women have long trailed men when it comes to retirement savings but new data from MassMutual Retirement Services shows that women are responding to the challenge and are closing the gap.
Data from marketing campaigns and employer-sponsored retirement plans shows that women are responding more favourably than men to initiatives encouraging retirement saving, especially women aged 18-34, MassMutual reports. Retirement saving rates among women are also catching up to those of men, but women's average salary deferral or savings rates still lag behind those of their male counterparts.
"The longer-term trends show women are taking retirement savings more seriously and in some instances are now eclipsing men," said Elaine Sarsynski, Executive Vice President, MassMutual Retirement Services. "MassMutual is seeing increases in the rates that women respond to campaigns to boost their retirement savings. We're now finding that women's retirement savings account balances in defined contribution plans such as 401(k)s are climbing faster than men's."
MassMutual provides services for approximately 37,000 retirement plans with 2.8 million participants and a total of $148 billion in assets under management as of June 30, 2014.
MassMutual, in analysing its data on retirement plan participants, found that the average retirement savings balance for women was up 17 percent from a year ago and 71 percent from 2009. The gap between the average balance between women and men narrowed to 37.8 percent in the second quarter from 40.5 percent in 2010.
Earlier this year, a campaign sponsored by MassMutual to encourage retirement plan participants to increase their deferral or savings rates yielded higher response rates for women than men. Younger women aged 18-34 led all retirement savers who increased their deferral rates. Women in this category increased their response rates by 38 percent from 2013 and 55 percent from 2012. Women aged 35-54 also showed more interest in retirement savings, with response rates rising by 42 percent from the same time last year.
MassMutual is seeing greater interest in retirement savings on the part of women overall and younger women in particular because the firm has been able to more tightly segment specific target markets and appeal to narrower demographic groups on their terms, according to Sarsynski. Retirement-saving messages, graphics, images and photos and delivery vehicles are being tailored to fit market segments to better connect with retirement plan participants, she explained.
While those marketing efforts are gaining traction, the average salary deferral rate for women continues to trail men, 5.37 percent to 5.70 percent of compensation, respectively. However, the deferral rates for women have remained fairly steady since 2010 while the rates for men have declined.