MassMutual Retirement Services Data Shows Women in 401(k) Plans are
Saving More, Borrowing Less
that two segments of its defined contribution plan participants are
increasing their savings levels at a higher rate than participants
overall. For the quarter ended
deferral rates at twice the level of men (4 basis point average
increase for women vs. 2 basis point average increase for men).
In defined contribution plans administered by
participants increased their deferral percentage during the first
quarter, marking the second highest percentage in a single quarter
since measurement began in 2007. In terms of age groups, as would be
expected, average deferral rates for the youngest savers (3.58%) are
lower than older participants (7.18%); however, the savings rates for
Gen Y are increasing at an accelerated rate. Participants age 29 and
under increased their savings levels by 2.29% vs. participants age 60
and over who increased by only .42%. Participants aged 40 – 49 had the
second highest savings level increase of .57% to an average deferral
rate of 5.27%. Also encouraging is that only 1.30% of participants
overall decreased their deferral percentage during the quarter and
only 2.98% stopped deferring.
The percentage of total participant assets in
and risk-based options reached an all-time high during the first
quarter of 2012, accounting for 24.7% of total retirement assets under
management, which is well above the industry average. Women continue
to favor age-based investments far more than risk-based options — in
fact, more than 2.5 times as much — at 72% vs. 28% respectively. Men
remain more evenly divided on their preferences, with approximately
53% in age-based vs. 46% in risk-based investments. Average account
balances for women rose 7.93% for the quarter vs. 7.27% for men, and
the gender gap is closing in terms of account balances. Average
account balances for women now trail those of men by 38.8% compared to
40.5% in late 2010.
While recent industry reports have cited increased loan activity among
retirement plan participants in general, at
percentage of participants who initiated loans (1.26%) and hardships
or other withdrawals (0.66%) was at its lowest level since 2007. This
data suggests that
against their retirement savings account can have a negative effect on
their efforts to achieve long-term retirement income success. Also of
note for the quarter, there was no significant difference in loan and
withdrawal rates between men and women. Historically, women have taken
greater percentages of loans and withdrawals. These declining rates
for women also contributed to helping close the average account
balance disparity between male and female participants.
"We believe the positive trends we are seeing in the first quarter
reflect
helping participants understand what it will take for them to
calculate and save towards sufficient income levels in retirement,"
says
actions towards their retirement savings goals. Deferral percentages
are up, with the greatest increase coming from Gen Y, and participants
are letting their money work for them by avoiding loans, withdrawals
and other behaviors that can have a negative impact," she adds.
information regarding MassMutual Retirement Services, please call your
retirement plan advisor or contact
About
Retirement Services is a division 3/8 and its affiliated companies and
sales representatives.
Founded in 1851,
that is run for the benefit of its members and participating
policyholders. The company has a long history of financial strength
and strong performance, and although dividends are not guaranteed,
every year since the 1860s. With whole life insurance as its
foundation,
needs of clients, such as life insurance, disability income insurance,
long term care insurance, retirement/401(k) plan services, and
annuities. In addition, the company's strong and growing network of
financial professionals helps clients make good financial decisions
for the long-term.
plans for 65 years. It offers a full range of products and services
for corporate, union, nonprofit and governmental employers' defined
benefit, defined contribution and nonqualified deferred compensation
plans. It serves approximately 1.6 million participants.
For more information, visit http://www.massmutual.com or find
regarding
visit massmutual.com/retire or find us on Facebook.com/retiresmart and
Contact:
SOURCE MassMutual Retirement Services
-0-
/Web Site: http://www.massmutual.com
CO: MassMutual Retirement Services
ST:
IN: FIN
SU:
PRN
— NE03002 —
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| Source: | Associated Press |
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