NEW YORK - Women are less involved with their 401(k) accounts than men, even though they report as high a degree of comfort in managing their accounts, according to a new survey conducted by the Melior Group for Northern Trust Retirement Consulting.
The differences in the 401(k) investing behavior of men and women is highlighting a trend among service providers toward segmenting education among different groups of plan participants, said Serge Boccassini, director of product development at Northern Trust Retirement Consulting, Chicago.
"To be honest, the whole marketplace is looking at that and turning from group education to ... a more individualized approach," Mr. Boccassini said. "Plan sponsors have gone from mothering them (participants) to not mothering and now to finding ways to get them to understand what they need to retire."
Women check their accounts and change their asset allocations less often than men, the study revealed. Some 50% of women check their 401(k) balances between statements compared with 67% of men, the survey stated. Fifty-three percent of men periodically make fund changes in their accounts but only 39% of women make fund changes. Overall, the majority of those who do make changes, 43%, do so annually, with 27% doing so monthly and 13% making changes quarterly or semiannually.
"I was surprised, but as I think about it, the women that I know both in business and outside of business are more long-term thinkers," said Mr. Boccassini. "I know that I was a day trader in my 401(k)."
Sandra Gritz, communication consultant for Northern Trust, agreed.
"I find that women tend to be more patient," Ms. Gritz said. "I look at my 401(k) asset allocation every year."
At the same time, neither men nor women seem financially prepared to retire. Despite the majority having retirement assets outside of their 401(k) plans, 44% of 401(k) plan participants who plan to retire in five years do not think they will have the funds to do so.
"I think a lot of people do not feel financially secure enough to retire," Mr. Boccassini said. "People are realizing the cost of supporting parents and/or children."
In general, people should be able to replace 75% of their income with a combination of 401(k), Social Security and pension plan income. "A lot of people are finding those three will not cover 75% of their income, and so they have to figure out how to live with 30% or 40%," Mr. Boccassini said.
But 74% of men were in favor of privatizing Social Security, compared with 58% of women, the survey noted. Overall, 56% of survey participants said they strongly agree with the idea of privatization and said they would invest a portion of their Social Security money in their 401(k) accounts.
"Our plan sponsors were surprised with the number of people who said they would roll money into 401(k) plans from Social Security if privatized," Mr. Boccassini said.
The survey also revealed some 79% of women indicated they would like their employers to provide investment advice to help them reach their retirement goals, compared with 65% of men. More than one-third of men and women combined would like plan sponsors to monitor their accounts to ensure they are making good investment decisions -39% of women, 35% of men. Also, 46% of men and 45% of women would like sponsors to automatically deduct a minimum sum of money from their paychecks to be deposited in their 401(k) accounts.
But neither gender was as interested in automatic enrollment upon being hired - 33% of men, 30% of women. Some 20% of women and 18% of men would like employers to make up the difference in value of their 401(k) plans should there be a prolonged market downturn, according to the survey of 450 participants in 401(k) plans conducted in March.