Anyone who's read Charles Dickens's David Copperfield is probably familiar with Mr. Micawber's financial recipe for happiness: “Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

How much worse, then, to run out of money not just during a single year, but five years too soon in retirement?

While women retirees and their sisters who have not yet retired expect their retirement to last 25 years, but their income to run out five years before that, they're also at higher risk than men to live in retirement in poverty.

Men, on the other hand, expect their retirement to last 23 years, but their income to last 25.

There are several reasons women are at such a disadvantage, including less confidence in managing savings and investments; the need to optimize Social Security and to replace a higher percentage of pre-retirement income; and taking investment risk—none of which are hallmarks of women's attitudes toward money.

MassMutual's new white paper “Closing the Retirement Gender Gap: What Your Clients Need to Know About Women and Investing” highlights not just women's fear of ending up broke, but also ways that women can better prepare so that it doesn't happen.

Women are also less likely to estimate accurately how long their savings will last in retirement. Close to half—43 percent—aren't sure how long their savings will last, compared with about a third of men. And women who have already retired anticipate living 30 years in retirement, while women who haven't yet retired only expect 21 years in retirement.

According to the report, just about a third of both men and women say they'll have to replace at least 75 percent of pre-retirement income when they retire; in fact, 41 percent of men and 45 percent of women say they'll only need 50 percent or less.

Retired women are also more likely than retired men to say they need to replace less than half of their pre-retirement income to live comfortably (40 percent, compared with 28 percent).

And while 97 percent of women say they want their investments to grow during retirement, that doesn't mean they're being aggressive in their investments—for fear of risk. They're also more likely to believe they should be more conservative in investing during retirement than their male counterparts.

However, women can be even better investors than men, since they work harder at saving, stick with investments longer, are willing to ask for professional guidance (directions, anyone?) and are willing to consider professionally managed asset allocation strategies for retirement saving.

Instant Insights /

Women fear running out of money in retirement 5 years too soon

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