Only 12% of women workers are “very” confident that they will be able to fully retire with a comfortable lifestyle, according to “19 Facts About Women’s Retirement Outlook,” a new study recently released by nonprofit Transamerica Center for Retirement Studies (TCRS).
“Today’s women are better educated and enjoy career opportunities that were unimaginable 50 years ago. Despite this progress, women continue to be at greater risk than men of not achieving financial security in older age,” says Catherine Collinson, CEO and president of Transamerica Institute and TCRS.
“A woman’s path to a secure retirement is filled with obstacles, such as lower pay and time out of the workforce for parenting or caregiving, which can negatively impact her long-term financial situation. Statistically, women tend to live longer than men, which implies an even greater need to plan and save,” Collinson adds.
As part of its 19th Annual Retirement Survey of Workers, TCRS surveyed more than 3,000 women workers. For the 14th consecutive year, the findings shed light on the vulnerabilities women face and highlight opportunities and action steps they can take to help improve their financial wellness and retirement outlook.
19 facts about women and retirement
- Only 12% of women are “very confident” that they will be able to retire with a comfortable lifestyle.
- Women are dreaming of an active retirement, including traveling (67%), spending more time with family and friends (59%), pursuing hobbies (44%), volunteering (28%), and working (26%).
- 55% of women expect to retire after age 65 or do not plan to retire.
- 54% of women plan to work after they retire, either full-time (12%) or part-time (42%).
- Among women who plan to work past age 65 and/or in retirement, more cite doing so for financial reasons (84%) than healthy-aging related reasons (69%).
- Some women are not being proactive enough to work past age 65. Only 48% say they are staying healthy, 44% are focused on performing well at their current job, and only 39% are keeping their job skills up to date.
- Slightly more than half of women are taking key steps to protect their long-term health, including eating healthfully (56%), exercising regularly, seeking medical attention when needed, and getting plenty of rest (all 53%).
- 31% of women are or have been caregivers during their working careers, and nearly all of them made at least one work-related adjustment as a result of caregiving, such as using vacation or sick days (38%) or missing work (36%).
- Paying off debt is a financial priority for almost two-thirds of women (65%). Only 49% of women cite saving for retirement as a priority.
- 32% of women expect Social Security to be their primary source of retirement income.
- 68% are saving for retirement through a workplace plan and/or outside of work in an IRA, mutual fund, bank account, etc. Women who are saving for retirement started doing so at age 27 (median).
- 61% of women are offered a 401k or similar employee-funded retirement plan. However, 30% of women work part-time so are less likely to have workplace retirement benefits.
- Among women who are offered a 401k or similar plan, 73% participate in the plan and they contribute 8% (median) of their salary to the plan.
- Women’s total household retirement savings is only $23,000 (estimated median).
- Women believe that they will need to save $500,000 (median) in order to feel financially secure in retirement; among those who estimated their savings needs, 54% say they “guessed.”
- Only 15% of women have a written retirement strategy, and 42% have an unwritten strategy.
- 37% of women use a professional financial advisor to help manage their retirement savings and investments.
- Just 29% of women are aware of the Saver’s Credit, a tax credit for saving for retirement.
- Few women (14%) frequently discuss saving, investing, and planning for retirement with family and friends.
Action items
“Smart actions taken today can lead to better outcomes tomorrow, and ultimately enable women to achieve a more secure retirement,” Collinson says. “Employers, industry players, and policymakers can also play important roles by implementing solutions that address obstacles and make it easier for women to plan and save.”
Since 2006, TCRS has published research illustrating how women are at a greater risk of not achieving a financially secure retirement compared with men, and how women can take action to help mitigate that risk and improve their financial wellness. The goal of the research is to raise awareness of the risks that women face and highlight opportunities in which they can take greater control of their long-term financial security.
“19 Facts About Women’s Retirement Outlook” includes a survey report with detailed survey findings and comparisons with men, as well as a shorter fact sheet. Both the survey report and fact sheet offer 10 action steps that women can take to help improve their retirement outlook.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
