Female employees are less prepared for retirement than their male counterparts. Only 3 in 10 women will have saved enough to retire comfortably by age 67. To learn more about closing the retirement savings gap for women, download the full infographic above.
Here are three major factors that drive the gap, and more importantly, what employers can do to help their employees enjoy a more secure retirement.
1. Facing Greater Needs with Fewer Resources
50% of women working today will live to 90 or later
Women's longer life expectancy means they will need more funds to support themselves in retirement.
2. Women Earn Less During their Careers
Women tend to earn less than male counterparts–a gap that compounds with their increased likelihood of taking time out of the workforce to care for family members. This may be a factor in women worrying more about running out of money in retirement.
When the gender pay gap is accounted for, women save at a rate that is in line with their male counterparts.
3. A More Cautious Approach to Saving
Women express less confidence in investing and managing their finances and tend to be more risk averse when it comes to retirement, using plan defaults and preset goals. Studies show that people experience better performance by not actively managing their retirement investments. However, sticking to preset rates will often be insufficient to meet retirement savings needs for women.
57% of women say dealing with money is stressful
Only 1 in 10 women is actively managing her investments
How Can Employers Help?
Since women face greater retirement needs and are likely to live longer than average, it is especially beneficial to provide options for guaranteed income to help protect against retirement shortfalls.
Help people who take time out of the workforce stay on track when it comes to retirement savings by encouraging them to continue saving, rather than tapping into those funds during periods when they are out of the workforce.
Understand the unique attitudes and retirement readiness of various segments of your workforce to enable effective plan design strategies and communication to those groups.
1 Living the Dream: Aon DC and Financial Wellbeing Employee Survey 2018
2 The Real Deal: 2018 Retirement Income Adequacy Study