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How (and Why) Men and Women Retire Differently

Maryalene LaPonsie

The differences between men and women don't end at age 65. Financial experts say there are gender differences not only in how people live in retirement, but also in how they approach it.

"We found men were slightly more likely to find the transition to retirement easier," says Cathy McCabe, senior managing director of the Field Consulting Group at TIAA. The financial services organization recently released the findings from its Voices of Experience report, which surveyed 1,500 retirees who are TIAA plan participants.

[See: 9 Retirement Planning Deadlines You Shouldn't Overlook.]

The ease of transition is only one thing that makes men and women different when it comes to their retirement years.

Excitement and fear mark retirement expectations. According to finance professionals, men and women seem to be motivated by different feelings when it comes time to actually transition from the workforce. Men may approach retirement as an extended vacation, while women are likely to focus more on the unknowns presented by this life change.

"Women are more realistic," says Jennifer Landon, president of Journey Financial Services in Idaho Falls, Idaho. "They seem to take a little more time to wrap their heads around the change."

Fidelity surveyed 12,000 retirement savers age 55 or older and found that women tend to think more about retirement. According to the investment firm, 59 percent of women say they have seriously thought about their retirement age in the past two years compared to 45 percent of men.

In particular, women want to be sure they'll be able to handle any financial contingency, says Nancy Coutu, a certified financial planner and co-founder of Money Managers Advisory in Oak Brook, Illinois. "The number one fear for women is being a bag lady."

Once they do make the leap to retirement, men and women spend their time differently as well. The TIAA survey found women were more likely than men to spend time with family or friends. What's more, 43 percent of women report caring for a family member in retirement, significantly more than the 26 percent of men who report the same. "The things we talk about with women in retirement are different," Coutu says. "Men think about golf and hanging out at the hardware store. Women think about children's wellbeing."

Differing investment styles. However, the retirement differences between men and women start long before it's time to leave the workforce. Most notably, women are generally more conservative with investments, while men are typically more aggressive.

In a 2014 report from finance firm BlackRock, 55 percent of the women surveyed said they were not willing to take any risks with their money, compared to 47 percent of men. While a third of men are comfortable investing in the stock market, only 21 percent of women say the same.

While women may be more cautious about investments, that shouldn't necessarily be seen a negative trait. "It's not about women needing to be coddled. They don't," says Rosemary Caligiuri, a managing director with United Capital in Langhorne, Pennsylvania.

Indeed, women's more conservative investment style doesn't seem to be hurting them in the long run. An analysis by robo-advisor SigFig found women investors earned an average of 12 percent more than men during 2014. That same analysis found men just edged out women in terms of beating the S&P 500 gains during that year. According to SigFig, 15.7 percent of male investors beat the S&P 500 compared to 14.9 percent of their female counterparts. At the same time, men were 25 percent more likely than women to lose money.

Coutu says a woman's conservative investments can cause problems if gains don't keep up with inflation, but being too aggressive comes with its own set of problems for men. "What if we have another 2008?" she says, referencing the year that saw the biggest single-day crash in the history of the stock market. "They may never retire."

[Read: How to Become a Millionaire by Retirement.]

Special considerations for women. Women don't just invest differently. They may also be impacted by circumstances that don't apply to men in the same way. "Women have all kinds of issues going on in their lives that men don't have," Coutu says. Those include taking time out of the workforce to care for children, gender pay gaps and a "father knows best" mentality that leaves financial matters to men.

Then, once they reach retirement, women may live longer which can, in turn, lead to higher health care costs. "Women seem to be a little more aware of health care needs," Landon says. "Not every woman brings it up, but it seems to be a common theme."

The next generation will be different. While today's retirees may have gender differences, societal changes could mean those disappear for future generations. That process may start with women becoming more actively involved in the financial-planning process.

"Women believe the financial industry as a whole is geared toward serving men," Coutu says. However, financial professionals may need to shift their approach in the years to come. Of women with at least $25,000 in investable assets, 41 percent are making financial decisions alone, according to a 2014 Ameriprise survey.

[See: 10 Steps to Max Out Your IRA.]

"The old clichés are starting to fall by the wayside," Caligiuri says. Many women are no longer content to let men handle the finances. Meanwhile, men might take a cue from women and minimize the risk in their retirement funds so they can maximize their reward.



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