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Retirement News
Like Mother, Like Daughter? Not When It Comes To
Retirement
New Metlife Mature Market study says they don’t see
eye-to-eye
 May 23, 2007 - A new survey released this month on
women and retirement may defy Oscar Wilde's adage that “all women become
like their mothers.” It's Not Your Mother's Retirement: The MetLife
Study of Women and Generational Differences reports that young women
have their own ideas about how they will spend their later years.
The study reports that retirement for women will be
redefined by the younger generations who expect to have a more active
retirement with varied pursuits, including travel, social interaction
with family and friends and an extended work life. However, daughters
are entering retirement with considerably higher levels of debt than
their mothers and are expected to make a greater financial adjustment
than their mothers.
Daughters (22%) are almost twice as likely as their
mothers (12%) to have $25,000 or more in consumer debt (apart from home
mortgages). Mothers, not surprisingly, are concerned about the younger
group’s ability to adjust to living on a fixed income. Each generation
is reportedly worried about being derailed by poor health and rising
health care costs.
Conducted for the MetLife Mature Market Institute®
by Mathew Greenwald & Associates, in cooperation with the Women’s
Institute for a Secure Retirement (WISER), the study asked mothers and
daughters to assess their own and each other’s retirement prospects.
“Today’s younger women clearly do not see
themselves staying home, caring for the house and relaxing - and their
mothers agree,” said Sandra Timmermann, Ed.D., director, MetLife Mature
Market Institute.
“These findings point the way to lifestyle changes
for tomorrow’s older women and may influence the growth and direction of
the education sector and the travel industry. We’ll find more people
traveling, taking courses and volunteering. There will also be an
increased number of older people in the workplace, unless the younger
generations’ predictions for themselves are overly ambitious.”
“Mothers advise their daughters to save more money
and not to ‘live beyond your means,’” added Dr. Timmermann.
“Daughters, when asked how they would have advised
their mothers, say, ‘don’t forget your dreams’ and be ‘willing to spend
money if it will make you happy.’ It will be interesting to see if
daughters, as they approach traditional retirement age and are faced
with the financial realities of a long life, are more open to their
mothers' advice.”
“Unfortunately, younger women may not be responding
to their mothers’ advice, nor emulating their behavior,” said Cindy
Hounsell, J.D., president of WISER.
“The older women, whose financial experiences are
very much tied to the Great Depression and post-Depression living, have
a conservative outlook toward saving and spending. Daughters report
having consumer debt and may not have sufficient pensions and
investments to retire with the recommended 80% to 100% of pre-retirement
income. Women heading toward retirement should be reexamining their
financial practices.”
The study also found the following:
Daughters Will Work Longer…or Forever –
Three quarters of mothers retired before the traditional retirement age
of 65, yet only 37% of their daughters predict they will retire before
then. 17% of daughters say they will be age 70 or older and 6% say they
may never retire. Married women in both age groups are more likely to
retire earlier than unmarried women.
Daughters Believe their Retirement will be
Better and More Interesting – Two thirds of mothers (65%) believe
the quality of their retirement has been excellent or very good, while
only 46% of daughters say that about their mothers. More than half of
daughters (56%) believe their own retirement will be better than their
mothers’ and four in ten mothers (41%) agree. Mothers and daughters
agree that daughters are more likely to spend their retirement time on
active pursuits and less time relaxing and “doing nothing.”
Daughters are More Likely to Face Financial
Adjustments – More than a third (34%) of daughters say their biggest
financial adjustment at retirement will be living on a reduced income or
budget, a concern shared by 28% of mothers. More than a quarter of
mothers say they did not have to make any financial adjustment when they
retired (29%).
Daughters Expect Different Sources of Retirement
Income – Nearly nine in ten mothers (90%), but just three in four
daughters (75%) report Social Security as a current or future source of
retirement income. By contrast, 77% of daughters, compared with 46% of
mothers, indicate their retirement will be funded by an
employer-sponsored retirement plan.
Home Equity May Save Daughters – 46% of
daughters and 45% of mothers will use their home as a source of
retirement income, either through selling the home or tapping into
equity. Among those who report that they expect to use their homes as a
source of retirement income, daughters (61%) are more likely than
mothers (43%) to say they will move to a less expensive home.
Husbands and Wives Play Equal Financial Roles
- Nearly half of married women say they share responsibility for
retirement planning (daughters, 47%) or managing finances (mothers 43%).
Mothers believe their married daughters take more responsibility than
they did for retirement planning.
Mothers and Daughters May Not Be Communicating
on Retirement – Half of mothers (51%) say they spend some or a great
deal of time discussing retirement and/or retirement planning with their
daughters.
Unfortunately, daughters may not be listening
- Less than one third of daughters report having those conversations
with their mothers (32%). Likewise, daughters say they speak with their
mothers more often than mothers report speaking with their daughters.
Editor's Notes:
Information for the study was gathered through
17-minute telephone conversations in February 2007 with 1267 women from
across the United States, evenly divided among Generation X (b.
1965-1977), late Baby Boomers (b. 1956-1964), early Baby Boomers (b.
1946-1955), the Silent Generation (b.1933-1945) and the World War II
Generation (b. 1926-1932). All had a household income greater than
$40,000 ($20,000 for the two older groups). The margin of error for the
study is +/-3%. Respondents were weighted to reflect the make-up of U.S.
women by age, household income, financial assets and marital status.
The Women’s Institute for a Secure Retirement
(WISER) works to provide low and moderate income women (aged 18 to 65)
with basic financial information aimed at helping them take financial
control over their lives and to increase awareness of the structural
barriers that prevent women’s adequate participation in the nation’s
retirement systems.
Mathew Greenwald & Associates, Inc. is a full
service market research company with an expertise in financial services
research. Founded in 1985, Greenwald & Associates has conducted public
opinion and customer oriented research for more than 100 organizations,
including many of the nation’s largest companies and foremost
associations.
The MetLife Mature Market Institute is MetLife’s
information and policy center on issues related to aging, retirement,
long-term care and the mature market. Staffed by gerontologists, the
Institute provides research, training and education, consultation and
information to support MetLife, its corporate customers and business
partners. MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a
leading provider of insurance and financial services with operations
throughout the U.S. and the Latin America, Europe and Asia Pacific
regions.
The full study, It’s Not Your Mother’s
Retirement, the MetLife Study of Women and Generational Differences, is
available free to the public by calling 203-221-6580, via e-mail to
maturemarketinstitute@metlife.com, or by download at
www.maturemarketinstitute.com under ‘What’s New.’ A companion
publication, produced by the MetLife Mature Market Institute and WISER,
What Today’s Woman Needs to Know: A Retirement Journey, is also
available.
For more on the MetLife Mature Market Institute,
visit:
www.maturemarketinstitute.com.
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