Practice Management

Take My Cares Away

By Tom Foster

Women tend to worry more than men about money, MassMutual’s research shows, and with good reason: women are three times more likely than men to say they can’t afford to save for retirement.

The data shows that many women are falling far behind on saving for retirement compared to men and those of us in the financial services industry – especially financial advisors – have a lot of work to do to help turn the situation around.

First, the facts: one in two middle-income women (51 percent) say they worry at least once a week about money compared to 45 percent of men, according to MassMutual’s Men & Women Finances Study (Men & Women Study)1.  Meanwhile, men are twice as likely to say they never worry about money, the Men & Women study finds.

Nearly half of Middle American women (47 percent) say they are “not very” or “not at all” confident about being financially secure in retirement compared to 39 percent of men, the study shows. The internet-based study polled 1,010 Middle Americans.

If you read between the lines, the findings from the study are a strong indication that advisors and the rest of the financial services industry are missing a big opportunity to make a difference and to help a constituency that the Boston Consulting Group estimates controls nearly $40 trillion or about 30 percent of the world’s wealth2. By 2020, women will control $72.1 trillion globally, according to BCG projections.

So how do you make a difference? How can advisors and their firms help millions of American women reach financial terra firma, save for retirement and feel more financially secure? And how do you capture and help manage some of those growing trillions of dollars in the process?

Fortunately, women are all ears when it comes to their financial futures. Seven in 10 women say they are interested in being educated about financial planning, MassMutual’s study finds. The first step, though, is to establish the client’s foundational knowledge about financial matters. Everyone has different backgrounds, areas of expertise and certainly different comfort levels when it comes to discussing personal finances. You can’t assume any client has a deep or complete understanding of financial matters or, conversely, doesn’t understand finances.

It’s especially true when conducting an educational meeting for 401(k) participants (or potential participants). Once you establish a client’s comfort level with financial matters, you need the right fit between a woman’s relative wealth and the right incentives for saving and investing. It’s been said that you can’t get blood (or money) from a stone. But women (or others) who say they can’t afford to save for retirement may simply be unaware of the assistance and incentives that are available to help them. And if you support a 401(k) or other defined contribution retirement plan, you know there are a few very strong incentives to save.

In such instances, ask clients or participants if they know about the Saver’s Credit. Like most people, the chances are they’ve never heard of it. The Credit is designed to encourage low-income Americans to put something aside for retirement by providing a tax incentive.  For the 2017 tax year, a married couple that files their taxes jointly and has an Adjusted Gross Income (AGI) of not more than $37,000 can obtain a credit of 50 percent of their retirement savings. The credit drops to 10 percent of retirement contributions for a married couple filing jointly with an AGI of $40,001--$62,000 and phases out completely for incomes above the latter threshold.3

Point out that saving on a pre-tax basis may make it more affordable to squirrel money away in an employer-sponsored retirement plan. Contributing pre-tax dollars to a 401(k) or similar plan can reduce their taxable income, potentially freeing up dollars for savings.

Take advantage of any employer match. While not all employers match employee contributions, many do. Suggest to your clients that they consider taking advantage of any matching contributions to accelerate their savings, eventually securing the available maximum in matching contributions.

Once people start saving regularly and their income grows, they can start thinking about boosting their savings by taking advantage of some additional incentives.

Workers who have access to a 401(k) or other defined contribution plan can save up to $18,000 annually. Even over a short time, those savings can quickly add up, especially with positive investment returns.

The catch-up provision, designed to help those closer to retirement pad their retirement savings, is an option for people who can afford to contribute the maximum and then some. Those who are age 50 or older save an additional $6,000 annually in a defined contribution plan for a total of $24,000.

It all starts with education. Advisors and their firms need to take the time to explain the benefits of saving regularly and the incentives available to do so. It just might help reduce many people’s worries about money, especially women.


E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual).


2017 MassMutual Middle America Men & Women Finances Study,

 Women’s Wealth Growing Faster than Men’s, Money,