Sent: 16-02-2010 14:05:13
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Gender is alive & well -- Part 4
This is the final installment in my series based on the report from the ING Institute for Retirement Research on the Gender Gap in relation to retirement savings, entitled: "GENDER GAP: Women & Retirement...all is not equal".
As I noted last time, increasing use of automatic enrollment in voluntary retirement savings plans may help kick-start retirement savings, as the introduction of compulsory savings did in Australia, but such approaches alone will not solve the retirement savings problem. Indeed, automatic systems in the US (and in other parts of the world) may not result in adequate savings rates, particularly for women, as they are often based on a percentage of a lower salary, especially when women need to accumulate more in terms of real dollars to accommodate longer expected life spans. This is exactly the problem that has developed in Australia, although 9% o salary is a lot better than the 3% that is common in the US.
As the ING report notes, women as consumers, wield increasing and in many cases overwhelming economic power. All interested parties, employers, advisors, financial product manufacturers etc. need to help women begin to exercise the same power and control over their own financial futures. The authors of the ING report argue that education, products and tools need to focus on the empowering steps women can take to achieve retirement independence.
They must accommodate the many generational and cultural differences that make women more than a single niche market, as they have been historically considered by many marketing efforts. Not only that, special consideration needs to be given to women on their own, heads-of household and single, who are at increased risk of underfunded retirement and have an greater need of relevant, practical advice and tools to help them overcome the substantial obstacles they may face.
Many of the tools and messages women need to better prepare for retirement exist today including: Lifecycle funds and managed accounts; varied and multi-media educational platforms, websites, tools and advocacy groups; automatic features in plans; financial advisors and planners; and proposed parameters for advice within Defined Contribution plans.
There's not a single one of these developments that's intrinsically "feminine" or solely benefitting women as opposed to men. But preparing for retirement is different for women than it is for men. It's not so much a question of what or how, but an issue of more, longer and better.
In terms of communicating with and reaching women, the ING report suggests the following:
- Consider generational, cultural, circumstantial and other differences when crafting and designing tools and messages to help women save better
- Themes such as empowerment, taking care of one's self tend to resonate well with women
- Women are more likely to seek advice than are men, give them resources to use
- Women are "brand" loyal, they will make purchase decisions , and continue to interact, based on their relationship with a brand, which is easily translatable for financial providers in all categories
- Women are on-line and Internet savvy, make sure you treat them appropriately
- Multi-tasking women want solutions that make life easier for them
- Emphasize information; women tend to gather more information than do men in making decisions. Not only that, they tend to accumulate data and information from multiple sources
- Avoid the cute and stereotypical (don't just Think Pink!)
- Women like to be interactive
Whilst not full proof, these suggestions from ING should at the very least make people think about the best approach. However, it is always worth remembering that one size does not fit all.
For those interested the report is:
GENDER GAP: Women & Retirement...all is not equal
By Catherine Smith, CEO of U.S. Retirement Services for ING
and Deb Dupont, Director, ING Institute for Retirement Research
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