Speaking at the Institute of Advanced Financial Planners Symposium in Nanaimo, B.C. on Thursday, Tanya Staples delivered an overview of her research on how prepared Canadian men and women are for retirement. Staples is a professor of financial planning & research at Conestoga College Institute of Technology and Advanced Learning’s School of Business. She holds a Ph.D. (ABD) in personal financial planning at Kansas State University. She will deliver her dissertation next month.
“I’ve always thought that the way we approach our health is often how we approach our finances,” Staples told her audience. “Avoid, avoid, ignore, ignore, until something terrible happens.”
She has combined original research with findings from the 2019 Canadian Financial Capabilities Study. Staples has also applied the Health Belief Model to her work, developed at U.S. Public Health Services in the 1950s to understand how people make health decisions.
“There are perceptions that individuals have that motivate them to engage in behaviour,” Staples explained. “They are motivated if the benefits that they see and experience outweigh the barriers and mitigate the threats that might impact them. … This model has been very effective.”
Staples’ interest in gender differences dates back to her time serving employers as a pension and benefits consultant in the late 1990s and early 2000s.
“Women experience very disrupted work-life-course patterns,” she said. “[They’re] in and out of the workforce for caregiving responsibilities. They’re less likely, in general, to have access to a pension plan, are less likely to earn as much as their male counterparts and all of these things set them up for a possibly different retirement. We do see an increase in financial insecurity among Canadian women in retirement.”
Staples laid out five things that indicate a client is preparing effectively: they have a retirement account; they’re saving for retirement; they have calculated how much money they’ll need in retirement; they have sought out financial advice; and they trust that advice.
“Only two in 10 women feel very prepared for retirement,” Staples said, referring to a U.S. finding published in 2015. “We know that women report lower levels of financial knowledge, lower levels of financial confidence … and lower levels of accumulated wealth.”
Financial confidence can have an outsized effect because, like health, so much of retirement planning has to do with making good behaviour decisions.
“What is our obligation as financial planners to support women?” Staples asked her audience. “If we look at things that keep our clients from properly preparing for retirement, what are they? Are there things that encourage our clients to engage in retirement planning? What are the benefits that motivate people to want to retire financially secure? And are there threats?”
She explains perceived benefits in her dissertation as “the expected value associated with the acceptance and implementation of the advised behaviour. Perceived benefits are positive effects of recommended action to reduce a threat …”
She listed six: having more income than expenses; becoming goal-oriented; feeling confident about retirement; becoming financially informed; managing money effectively; and making informed financial decisions based on price and value.
There are four barriers to preparing: indebtedness; not having an emergency fund; a poor credit score; and not feeling in control of household finances.
Staples said the threats to retirement preparedness are mostly psychological: feeling like you can’t afford what you want; fearing that you will run out of money; not keeping track of your finances; experiencing money problems; feeling like you’re just getting by; and regretting financial decisions after the fact.
Half of women don’t know what they need to save
Among 35- to 64-year-old women respondents to the 2019 Canadian Financial Capabilities Study, Staples said just 53% of working age, non-retired women had run the numbers on what they’re going to need in retirement. One-third of women rated themselves knowledgeable or very knowledgeable about finances compared to 47% of men.
Women are more likely to accept and trust professional financial advice too — 67% agreed or strongly agreed with that statement, versus 62% of men.
Staples’ call to action includes education aimed at women emphasizing the benefits of retirement planning; removing barriers to women’s ability to earn and save; and implementing policies that make it easier for women to balance caregiving with work and address “the precarious nature of women’s employment.”
She’s planning another round of study too. Staples will compare the findings of the 2024 Canadian Financial Capabilities Study to the 2019 results, to get a handle on the effects of Covid on all of this.
With that follow-up research and the completion of her doctorate, Staples is emerging as a key thought leader in the Canadian financial planning industry. We’re lucky to have her.