Women are more worried than men are about financing retirement, and are more likely to use financial advisors, suggests new research released Tuesday by the Ontario Securities Commission (OSC).
The report from the regulator’s Investor Office details the results of a survey of Ontarians aged 45 and older on financial knowledge, attitudes, and behaviours towards retirement planning.
Among other things, the research found a gender gap when it comes to the use of financial advisors. According to the survey, 45% of female respondents say that they need an advisor to help plan for retirement, and 69% are actually using an advisor. That compares with 39% of men who say that they need an advisor to plan, and 62% that actually use an advisor.
Conversely, men are much more likely to go it alone when it comes to investing. The survey found that 32% of men say they use an online discount brokerage, compared with just 17% of women. Men are also much more likely to do their own investment research.
The research also found a gap in how women and men view their financial knowledge. “Compared to men, women report that they are less knowledgeable and more stressed when it comes to retirement savings,” the report says.
Indeed, just over half of men say that they have “good” or “excellent” financial knowledge, compared with just 27% of women. This gender gap in reported investment knowledge, “persists in all age groups,” the report says. Women are also more concerned about retirement, and are more worried about running out of money, it adds.
Overall, the top financial concerns for survey respondents are retirement-related, “including having enough money for retirement, planning and saving for retirement, and maintaining a quality of life in retirement,” the report says. Beyond that, 13% of respondents also worry about funding their current expenses, 10% stress about their debt levels, and 9% are concerned about investment performance, growth and protecting capital.
Amid these retirement worries, the report indicates that many Ontarians are planning to use their homes to help fund their retirements. The survey found that 37% of homeowners 45+ say “they are relying on the value of their home increasing to provide for their retirement.”
“This approach to retirement planning can be sustainable so long as residential properties maintain or increase in value. However, to the extent Ontarians 45+ are overestimating their ability to finance their retirement using their homes, or if there is a downward pricing correction in Ontario’s housing market, a number of Ontarians 45+ may be at risk of not meeting their retirement savings goals,” the report warns.
“The smaller the amount of investment savings, the more likely the pre-retiree is to rely on an increase in their home’ value to finance their retirement,” the report says.
“Owning a home is not a substitute for retirement planning,” says Tyler Fleming, director of the OSC’s Investor Office, in a statement.
The research was carried out for the OSC by Innovative Research Group Inc. The results are based on an online survey of 1,516 Ontarians, aged 45 and older, between May 9 and 16.
The research will be used to support the development of its seniors strategy, the OSC says.
Photo copyright: wavebreakmediamicro/123RF