According to the Women’s Retirement Savings Outlook survey by the Transamerica Center for Retirement Studies (TCRS), confidence in women’s retirement savings is waning, with fewer women completely confident in their ability to retire comfortably.
In fact, the organization found that only 19% of women workers say they are “very” confident they will be able to fully retire with a comfortable lifestyle.
“Today’s women are more educated and enjoy unimaginable career opportunities than previous generations. Yet, despite these advancements, women continue to be at greater risk than men of not achieving a financially secure retirement,” said Catherine Collinson, CEO and president of Transamerica Institute and TCRS. “The gender pay gap leaves women with less income available to save. Moreover, women are more likely to take time out of the workforce for parenting and caregiving – an invaluable labor of love without pay. These factors impair a woman’s lifetime earnings, retirement savings, and government and employer benefits. On top of these factors, statistically, women live longer than men, so they have an even greater need to save for older age.”
As part of the TCRS’ 23rd annual survey, the organization included 23 facts about women’s retirement, fielding responses from women workers aged 18 and older and employed by for-profit companies.
23 facts on women’s retirement
The list of nearly two-dozen facts includes:
- More than half of women (57%) feel they don’t have enough income to save for retirement.
- Saving for retirement (53%), building emergency savings (44%), paying off credit card debt (43%), and just getting by to cover basic living expenses (37%) are women’s most often cited financial priorities.
- Women have only $2,400 in total household emergency savings (median).
- Only 19% of women are “very confident” that they will be able to fully retire with a comfortable lifestyle.
- Most women (75%) are saving for retirement at work and/or outside the workplace.
- Women who work full-time (79%) are more likely to be offered a 401(k) or similar employee-funded retirement plan than women who work part-time (45%).
- Among women offered a 401(k) or similar plan, 76% participate, contributing 10% (median) of their salary.
- Thirty-six percent of women have taken a loan, early withdrawal, and/or hardship withdrawal from their 401(k) or similar plan or IRA.
- Women estimate they will need to save $500,000 (median) to feel financially secure in retirement, but more than half (52%) say they “guessed” their savings needs.
- Women have $44,000 in total household retirement savings (estimated median).
- Twenty-seven percent of women expect Social Security to be their primary source of retirement income.
- Seventy-six percent of women are concerned that Social Security will not be there for them when they are ready to retire.
- Forty-one percent of women are currently or have previously served as caregivers during their working careers. Among them, more than eight in 10 (84%) made work adjustments because of caregiving such as missing days of work (37%).
- Less than one in four women (24%) have a financial strategy for retirement in the form of a written plan.
- Only 32% of women use a professional financial advisor.
- Fewer than half of women (42%) are aware of the Saver’s Credit, a tax credit for eligible taxpayers who save for retirement in a qualified workplace retirement plan or IRA.
- Few women (20%) frequently discuss saving, investing, and planning for retirement with family and close friends.
- Women are planning to live to age 89 (median) and 13% plan to live to age 100-plus. Forty percent said they are “not sure” of the age they are planning to live, which is a reasonable answer but not useful for financial planning.
- Women dream of an active retirement including travel (65%), spending more time with family and friends (57%), pursuing hobbies (44%), working (27%), volunteering (22%), and taking care of grandchildren (21%).
- Fifty-five percent of women expect to retire after age 65 or do not plan to retire – and 53% plan to work in retirement.
- Among women who plan to work past age 65 and/or in retirement, more cite financial reasons (84%) than healthy-aging reasons (75%).
- Many women could be more proactive about ensuring they can work as long as they want and need. Just 59% say they are staying healthy, and 50% are keeping their job skills up to date.
- Women could be doing more to protect their long-term health. Given what is at stake, relatively few women are eating healthy (52%), exercising regularly (52%), socializing with family and friends (52%), and getting plenty of rest (49%).
Improving outlooks
Transamerica includes strategies women and their financial advisors’ can take to improve attitudes towards retirement, including creating a budget and sticking with it, becoming personally involved with family finances and investments, including retirement accounts, and having a backup plan in the case of unforeseen events like divorce, loss of a partner, or being unable to work before retirement.
Additionally, Transamerica looks to employers and lawmakers to take action towards women’s retirement security. For example, plan sponsors could offer flexible work arrangements to support work-life balance, extend benefits eligibility to part-time workers, and consult with benefit advisors and retirement plan providers to learn more about SECURE 2.0 benefits.
Alternatively, Transamerica calls on policymakers to support family caregivers by providing Social Security credit to those who forego employment to provide care, encourage employers to implement supportive business practices for women, and address retirement plan access within underserved communities.
“Everyone must play a role in improving women’s retirement security so that all women can retire with dignity,” said Collinson. “Policymakers can pave the way by addressing structural impediments, employers can enhance their business practices and benefit offerings to be more inclusive of women’s needs, women can further engage in financial planning, and men can be greater advocates and allies.”
SEE ALSO:
- Incentives Highlight Return of Transamerica ‘401(k)ares’ Campaign
- The Very Real Fears of Retirees and Pre-Retirees: Running Out of Money
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.