The retirement woes for women continue.
The COVID-19 pandemic has struck another blow with a new report showing that women’s confidence in retirement planning is seriously shaken. According to Nationwide Retirement Institute’s latest report, nearly one in five (18%) women feel they are on the wrong track for retirement, and the same percentage expects to retire later than the originally planned due to the pandemic, corroborating earlier reports.
The findings show that women continue to lag their male counterparts when it comes to hitting financial milestones. Approximately 50% of women contributed to a 401k or individual retirement account compared to 58% of men. The gap was even more pronounced when asked about building an emergency fund (47% of women versus 59% of men) or increasing their retirement plan contributions (39% of women versus 51% of men).
This alarming trend has not gone unnoticed by employers with 66% of plan sponsors saying that they have noticed that women are more likely to make changes to their retirement plans than men since the pandemic began. Additionally, 70% of plan sponsors say that they feel that female participants are more likely to have been financially impacted by the pandemic than men. Nationwide indicates that a major factor could be the impact of family responsibilities falling more on women with with one-third reporting that they had considered leaving their jobs or downsizing their careers in 2021, compared to only one in four in the first year of the pandemic.
And these concerns are not confined to the numbers on a 401k statement. It’s influencing their overall well-being. Many women are experiencing negative emotions when thinking about their current retirement plan status, including being worried (34%), frustrated (15%) and even panicked (10%). Percentages increase for women who have delayed or cancelled their retirement plans, with 45% feeling worried, 54% frustrated and 16% panicked. In fact, 51% of women who have delayed or cancelled their retirement plans say the decision has negatively affected their mental health.
“Working through the pandemic hasn’t been easy for anyone,” said Amelia Dunlap, Nationwide’s Vice President of Retirement Solutions Marketing, but noting that many women are having to balance child or elder care challenges, along with career burnout.
‘This only adds to the stress that women are facing, feeling off course from their overall financial and retirement goals.”
Women seek retirement adjustments
The good news? Women aren’t sitting around waiting for the inevitable. Nationwide finds that of the women who are expecting to delay or cancel their retirement plans, 67% say they’ve shifted their overall approach to saving for retirement in response. And they are interested in exploring solutions that can help them reach their goals. Almost half of female participants showed interest in the in-plan guaranteed lifetime income investment option, more than any other option provided to them. A little over one in three are likely to roll over their retirement savings into one if given the chance. The female participants who don’t contribute to a guaranteed lifetime income investment option say that their biggest barriers stem from a lack of knowledge.
Nationwide’s Dunlap says that plan sponsors have an opportunity to explore solutions that help their participants–especially females–retire on time. She adds that it’s vital that “plan sponsors must also include educational offerings to ensure participants have the tools they need to address lack of knowledge and confidence.”
Lynn Brackpool Giles is a contributing editor to 401(k) Specialist. Giles is a former Managing Director of Communications and Consumer Services for the Financial Planning Association (FPA), where she oversaw all corporate, legislative, and consumer communications. In her current journalistic practice, she is a frequent contributor to numerous financial services industry publications.
