Despite the fact that 2010 was generally a good year for retirement plan investors, with average balances returning to pre-recession levels, it appears that the economic uncertainty and market volatility have contributed to lower levels of investing confidence.
Among women in particular, confidence in investment decisions and the stock market is much lower vs. men, and the gap is widening, according to a MassMutual’s Retirement Services Division online survey.
MassMutual’s data indicates that men believe the stock market will improve vs. decline in the next 12 months at a ratio twice that of women (16:1 for men vs. 8:1 for women). Overall, only 37.3 percent of participants are confident in making their own investment decisions (vs. 42.5 percent last year).
However, women were significantly less confident in making their own investment decisions (25.9 percent) compared to men (44.1 percent). At the same time last year, the percentages were 32.8 percent for women and 47.8 percent for men. Likewise, more men enjoy learning about investments (71.7 percent) than do women (54.4 percent), and more women (53.1 percent) than men (35.1 percent) also prefer to spend as little time as possible on investment decisions.
The survey indicates that anxiety about having adequate savings to retire is increasing. Overall, 66.6 percent are concerned they won’t have enough saved for retirement vs. 64.9 percent last year. Participants of both genders are also becoming more conservative in terms of their investing behavior. Among participants who made a change in their approach to investing in the last 12 months, 61.7 percent became more conservative compared to 38.3 percent who became more aggressive.
"Being able to retire is the greatest overall concern among defined contribution plan participants by a large margin – almost two and a half times the concern about healthcare costs (15.2 percent), and much higher than job security (11.7 percent) and managing debt (14 percent)," said Elaine Sarsynski, executive vice president of MassMutual’s Retirement Services Division and chairman and CEO of MassMutual International LLC. "In addition, 57.1 percent of participants are likely to seek help from a financial planning advisor in the next 12 months, with many preferring the assistance of the retirement plan advisor representing the plan."
