For Release: June 4, 1998

      Contacts:
      Ellen Philbin   781.736.3943
      National Center on Women & Aging

      Faith Weiner    671.443.9933
      The Rasky/Baerlein Group
 

Waltham, MA -- As the President and Congress convene a high level summit on retirement savings, a new study on womenís financial planning for retirement conducted by the National Center on Women & Aging, at Brandeis University, raises concerns about how proposals being considered will affect womenís retirement income.  According to Dr. Phyllis Mutschler, the Center's Executive Director, the study shows that women shy away from taking risks with their savings; hence, they invest too conservatively.  As a result, the proposals offered to "fix" the Social Security program by "privatizing" some portion of future retirees' funds will likely harm midlife and older women in their later years.

The Center, based at the Heller Graduate School at Brandeis, conducted in-depth interviews with 500 midlife and older women across the nation to discover what steps they had taken to save and invest for the future.  "Our results show that even educated women with higher incomes lack knowledge about investing and are averse to risk," says study director, Professor James Schulz.

The Centerís study, "Financial Challenges for Mature Women:  Creating Financial Plans and Evaluating Financial Planners," reveals that reforms requiring women to invest in Private Savings Accounts can expose women to significant risks:

¨ The women sampled knew most about and were most likely to hold "safe" investments -- savings accounts, money market funds, U.S. savings bonds, and Certificates of Deposit.

¨ Study participants worried about finding and choosing a professional financial planner.  More than half of the women studied were afraid of becoming the victim of a scam.

¨ Women with lower incomes and less education were the most reluctant to trust someone outside of their families or circle of friends.

By design, a majority of the women in the study had incomes in the middle or upper ranges.  Yet even these relatively "well-off" women faced fears and barriers to successful financial planning.  "Women with dramatically lower incomes or far less education face even greater obstacles to successful planning for retirement," says Mutschler.  These are the very women that Social Security currently succeeds in protecting from poverty.  If forced into Private Savings Accounts, these mid- to low-income women -- who struggle to put away money for retirement -- are likely to rely on friends and relatives for investment strategies or to invest in instruments that will not keep pace with inflation.  The result may well spell many years of privation.