The Common Denominator: Understanding the Importance of Commonality When It Comes to Retirement Advice

In my recent testimony on “Gaps in Retirement Savings Based on Race, Ethnicity and Gender” for the U.S. Department of Labor Advisory Council on Employee Welfare and Pension Benefit Plans, one of the key discussion points was the importance of “commonality.” Specifically, “2021 Retirement Confidence Survey (RCS): A Closer Look at Black and Hispanic Americans” found that — when looking for an advisor — Black and Hispanic Americans were asked if “working with an advisor who has had a similar upbringing or life experience as you” was an important criterion: 61 percent of Black respondents and 57 percent of Hispanic respondents, vs. 41 percent for White respondents, said this criterion was important.

However, one cohort that expressed less interest in having an advisor with a similar upbringing or life experience was female workers, with 45 percent saying this was important. Also of less importance to female workers was whether the advisor was the same gender as them: Only 27 percent said this was important, compared with 39 percent of males.[1]

This may bear some further investigation. In “2020 Retirement Confidence Survey: Attitudes Toward Retirement by Women of Different Marital Statuses,” we examined responses of women by marital status and found that while married women workers listed a professional financial advisor as one of the top three sources of information they use for retirement planning, financial advisors were not among the top three listed for divorced or never-married women — who instead used family and friends, Google, or none of the above.

Part of this finding may owe to the fact that divorced and never-married women have substantially less assets than their married female counterparts: 38 percent of divorced and 42 of never-married women workers had less than $1,000 saved, compared with 14 percent of married women workers. The divorced women workers were markedly more likely to have smaller levels of assets, as 72 percent had less than $25,000 in assets vs. 54 percent for never-married women workers and 31 percent for married women workers. Not surprisingly, given their low levels of assets, divorced women workers expressed far more interest in access to emergency savings accounts or programs to help with near-term needs than long-term savings help. 

The 2022 Retirement Confidence Survey will continue to explore differences in savings and retirement by gender. We will also oversample LGBTQ+ workers and retirees to further understand how various cohorts are approaching saving for and living in retirement. Please consider partnering with EBRI on this important work and sponsoring the 2021 Retirement Confidence Survey: Focus on Gender, Marital Status, and the LGBTQ Community.  Contact jaffe@ebri.org.

[1] From the 2021 RCS Funders Report, which is available only to sponsors of the RCS.