New report examines retirement risks for women in the labor market
LOS ANGELES, November 17, 2022 /PRNewswire/ — More than four in 10 working women (41%) plan to retire at age 70 or older or don’t plan to retire, according to Coming Out of the COVID-19 Pandemic: Women’s Health, Money, and Preparing for Retirementa study released today by the nonprofit Transamerica Center for Retirement Studies® (TCRS) in collaboration with Transamerica® Institute.
“Women are at even greater risk than men of not achieving a financially secure retirement due to societal headwinds including the persistence of the gender pay gap, time out of the labor market for parents and care, and reduced access to employer and government benefits,” said Catherine Collinson, CEO and President of the Transamerica Institute and TCRS. “Coming out of the pandemic, we need to shine a light on women’s longevity and their retirement insecurities. Now is the time to implement solutions so that all women can retire with dignity.”
As part of TCRS 22nd Annual Retirement Survey, the new study examines the retirement prospects of working women and includes recommendations for women, employers and policy makers to improve retirement security. The survey, one of the largest and longest of its kind, was conducted in late 2021 among workers employed in for-profit companies.
The financial fragility of female workers
“Working women have weathered a financial storm amid the pandemic. Many have suffered negative employment impacts that could jeopardize both their short-term finances and their future retirements,” Collinson said. The survey results illustrate the financial challenges faced by female workers:
- Thirty-seven percent experienced one or more negative impacts on their jobs as a result of the pandemic, including reduced working hours (21%), reduced wages (13%), furloughs (11%) and layoffs (11%).
- More than four in 10 female workers struggle to make ends meet (44%), while 57% believe they do not have enough income to save for retirement.
- Fifty-eight percent cite paying off some form of debt as a financial priority. Other financial priorities include saving for retirement (50%), building emergency savings (38%) and simply meeting basic needs (31%).
- Emergency savings are low. Women only have $2,000 (median) in emergency savings. Emergency savings increase with age: Gen Z women saved $500Millennials have saved $1,400generation X saved $3,000and baby boomers saved $7,000 (medians).
- Thirty-eight percent are currently serving or have served in the past as a caregiver for a relative or friend during their working career (excluding parental responsibilities). Eighty-four percent of them have made adjustments to their employment situation, including missing days of work (35%), reducing hours (25%), quitting a job (10%) and forgoing a promotion (7%).
Risky retirement prospects for women
“Women’s current financial challenges often undermine their long-term retirement confidence. Most women also worry about the future of government pension benefits,” Collinson said. Only 21% of working women are “very” confident that they will be able to fully retire with a comfortable lifestyle, and only 24% “strongly” agree that they are building a large enough retirement nest egg. Seventy-six percent worry that Social Security won’t be there for them when they’re ready to retire.
The survey results further illustrate women’s risky retirement prospects:
- Twenty-eight percent of working women expect to depend on Social Security as their main source of retirement income, while 45% expect to rely on self-funded savings from 401(k)/403(b)/IRAs and/or other savings and investments, and 16% expect to rely on income from work.
- Sixty-nine percent are offered a 401(k) or similar plan by their employers, including 75% of those who work full time, but only 47% who work part time.
- Nearly three in four are saving for retirement (73%) through employer-sponsored plans (eg, 401(k) or similar plans) and/or outside of the workplace (eg, in IRAs, mutual funds, or bank accounts). Among women who save, they started saving at age 29 (median).
- Eighty-one percent plan to work after age 65 or do not plan to retire cite financial reasons for this, while almost as many (77%) cite reasons related to healthy aging.
- Household retirement savings are alarming. The workers only saved $43,000 (estimated median) in all household retirement accounts. Retirement savings increase with age: Gen Z women have saved $26,000Millennials have saved $29,000generation X saved $51,000and baby boomers saved $101,000 (estimated medians).
Recommendations for Improving Women’s Retirement Security
“Fostering women’s financial security requires collaboration among stakeholders, including policymakers, employers, and individuals, to tackle deep-rooted issues and modernize our retirement system for current and future generations,” Collinson said. Each of these stakeholders could take additional actions, including:
- Policy Makers can implement social security and health insurance reforms to ensure their sustainability. Additionally, policymakers can implement new reforms to expand access to workplace retirement plans, increase incentives for employers to offer plans, and make it easier for women to save for retirement..
- Employers can ensure gender pay equity. They can expand their retirement, health, and benefits offerings for all employees, including full-time and part-time workers. They can also offer flexible working arrangements, which can help all employees find work-life balance and potentially allow them to stay in the workforce despite competing demands.
- Women can better control their future by gaining a full understanding of their situation, creating a financial plan, setting goals, considering the financial implications of being out of the workforce, and developing a retirement strategy.
“Women’s ability to secure a secure retirement ultimately depends on fair wages throughout their working years, access to pensions and health and welfare benefits, and preservation of safety nets such as Social Security and Medicare,” Collinson said. “As we emerge from the pandemic, we have an unprecedented opportunity to close gender inequalities during a woman’s working years and into her retirement.”
Coming Out of the COVID-19 Pandemic: Women’s Health, Money, and Preparing for Retirement provides detailed survey results and comparisons between women and men. It also provides recommendations for workers, employers and policy makers. Since 2006, TCRS has published research reports and conducted awareness campaigns focused on women as part of its annual retirement survey. To download the report, visit www.transamericainstitute.org. Follow on Twitter @TCRStudies.
Abohyout Transamerica Center for Retirement Studies
Transamerica Center for Retirement Studies® (TCRS) is an operating division of Transamerica Institute®, a private non-profit foundation. The Transamerica Institute is funded by contributions from Transamerica Life Insurance Company and its affiliates and may receive funds from unaffiliated third parties. TCRS and its representatives cannot give ERISA, tax, investment or legal advice. This material is provided for informational purposes only and should not be construed as ERISA, tax, investment or legal advice. For more information, visit www.transamericainstitute.org and follow TCRS on Twitter at @TCRStudies.
About Transamerica’s 22nd Annual Retirement Survey
The 28-minute online survey was conducted in the United States by The Harris Poll on behalf of the Transamerica Institute and TCRS. between October 28 and December 10, 2021 from a nationally representative sample of 5,493 workers in a for-profit enterprise with one or more employees, including 2,686 women, 2,768 men and 39 workers who do not identify with any gender. Results were weighted where necessary to align with US resident population, referencing census data for education, age, gender, race/ethnicity, region, income household size, education, employment, marital status and household size. The weighting also takes into account differences in attitude and behavior between those who are online and those who are not, those who join online panels versus those who do not, and those who respond to surveys. compared to those who do not.
Media Contact: Morgan Karbowski
SOURCE Transamerica Center for Retirement Studies