Retirement Planning: It's complicated

I'm a man. So that makes me a relative outsider when it comes to speaking about women and their focus on retirement. It doesn't necessarily mean I have a bias of any sort; simply that understanding why most women - or at least those who answered the latest ING survey about women and retirement, still haven't embraced retirement planning.

The survey uncovered a number of different bullet points that make me ponder the future retirement plans of women. For instance:

• Seventy-eight percent of women say they lack financial savvy about retirement planning. It is extremely hard to quantify savvy. It could mean the ability to approach the subject with confidence, something men only pretend to have. Men, as even more numerous surveys have uncovered, do more research but those same surveys do not suggest that men actually do better than women at investing. In fact, men tend to have a more free-wheeling approach to spending and credit, which if calculated against their ability to retire in a better financial place, leaves them somewhat behind. Or savvy could simply mean they don't focus on what they don't know because the topic is still, even after all we have been through, is not a clear as it should be.
• Thirty-three percent let their significant other make the retirement planning decisions. This is interesting because there are few women who believe that their spouse will ultimately outlive them. Numerous studies have suggested that at the point of retirement, men make decisions about what they have accumulated without taking this longevity issue into account. When some male retirees choose an annuity, they do so without considering their own demise might occur before their spouses. Instead, they look at the monthly dollar amount they will receive and take the highest figure possible. Doing so, eliminates much of the spousal benefit leaving their survivors with far less. Worse, men who chose not to take the annuity choice at retirement, believe they can invest their account and do so at the risk of drawing the balance down to a point where their spouses have little left.
• Thirty percent have no idea what their main source of retirement income will be. I can tell you with almost complete certainty: a woman will have accumulated less over the course of her working career. She will have had interruptions due to children and possibly aging parents and when that occurs, her 401(k) is usually less at the end of a working career and her Social Security, because of those missed years, will also be smaller than her spouses. It is important to keep in mind that divorce and single parenthood also jeopardize the long-term strength of any retirement accounts. Focusing on the present day, while important in terms of staying financially solvent, doesn't provide income in the future. It will however create a more financially solvent future if they have saved no matter what their situation.
• Thirty-seven percent of women blame complicated Wall Street jargon as well as trouble managing their everyday expenses as hurdles that prevent them from being savvy about investing. While women struggle searching for the truth, men fake it. Wall Street jargon is designed to be convoluted and will not change simply because you don't understand it. There are some simple steps you can take that even men ignore: keep investing no matter what the market is doing in the present tense; invest more than you can afford and adjust your daily budget to accommodate it; use index funds across a wide swath of the market; know that savings is safe and investments involve risk but using index funds lowers the risk while lowering the cost of investing.

In all, 65 percent of those surveyed described themselves as "traditional" rather than "modern" women. Of all of the statistics, this is the most gratifying. If traditional means what I think they suggest it does, then this implies prudence and pragmatism, curiosity but skepticism, and most importantly, an approach that takes the whole into consideration rather than the self-centered approach most men tend to use. If traditional means understanding the impact of credit, the belief that they will live long in retirement, and that they care more for their loved ones and want to see them do well, then this is encouraging.

All they need do is get in touch with only a few of the things men do when it comes to investing; but certainly not all. Because men don't statistically do better at investing; they simply do more of it.