Data from marketing campaigns and employer-sponsored retirement plans shows women are responding more favorably than men to initiatives encouraging retirement savings, especially women ages 18 to 34, MassMutual reports. Retirement savings 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.
MassMutual, in analyzing its data on retirement plan participants, found the average retirement savings balance for women was up 17% from a year ago and 71% from 2009. The gap between the average balance between women and men narrowed to 37.8% in the second quarter of 2014, down from 40.5% 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 ages 18 to 34 led all retirement savers in terms of increased deferral rates. Women in this category increased their response rates by 38% from 2013 and 55% from 2012. Women ages 35 to 54 also showed more interest in retirement savings, with response rates rising by 42% from the same time last year.
“The longer-term trends show women are taking retirement savings more seriously and in some instances are now eclipsing men,” says Sarsynski.
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 Elaine Sarsynski, executive vice president, MassMutual Retirement Services. Retirement-saving messages, graphics, photos and delivery vehicles are being tailored to fit market segments to better connect with retirement plan participants, she explains.
While those marketing efforts are gaining traction, the average salary deferral rate for women continues to trail men, at 5.37% vs. 5.70% of compensation, respectively. However, the deferral rates for women have remained fairly steady since 2010, while the rates for men have declined.
The analysis also found there are differences in deferral rates not only by gender but by industry and geography:
- The states with the top three average salary deferral percentages among women were Montana (8.56%), Michigan (8.02%) and Rhode Island (7.53%); the lowest three states for women were West Virginia (4.49%), Mississippi (4.77%) and New Mexico (4.98%).
- The states with the top three average salary deferral percentages among men were Montana (8.18%), Hawaii (8.13%) and Delaware (7.73%); the lowest three states for men were Arkansas (5.35%), Mississippi (5.43%) and Utah (5.55%).
- The industries with the top three average salary deferral percentages among women were health care and social assistance; manufacturing; and finance and insurance.
- The industries with the top three average salary deferral percentages among men were manufacturing; professional, scientific and technical services; and finance and insurance.