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Women face more, and unique, secure retirement challenges

Women at work_christina-wocintechchat-com-MTvPWhQKZK4-unsplash
Women are making some advances in workplaces, but still face challenges when it comes to saving for a secure retirement. (Photo by Christina @ on Unsplash)

I've spent most of my professional life writing and, for the most part, I've enjoyed it. But I've also, for the most part, looked forward to tapping away at a keyboard because I want to, not because I have to.

That's part of the reason I shifted to freelancing. The freedom of being an independent contractor is, (one more time) for the most part, the best thing about the arrangement.

So that I can truly write just what I want, I've also saved. Most of that went into tax-favored retirement savings options. That included 401(k)s when I did work for a company, IRAs, and self-employed retirement plans.

The result, thanks to my early start and the power of compounding, means that the hubby (who followed a similar strategy) and I are in pretty good shape when it comes to saying so long to working.

That's not the case, however, for many, according to a recent survey. And women face even more challenges when it comes to financially secure post-work years.

Working instead of retiring: Those findings are from the 22nd Annual Retirement Survey by Transamerica Center for Retirement Studies (TCRS) in collaboration with Transamerica Institute.

Here are some topline numbers from the online survey, conducted in the last quarter of 2021 by The Harris Poll on behalf of Transamerica Institute and TCRS:

  • Thirty percent of women say the COVID-19 pandemic changed their retirement expectations, including 22 percent who expect to retire later and eight percent who expect to retire earlier.

  • Forty-one percent of women expect to retire after age 70 or do not plan to retire. That percentage includes 24 percent who expect to retire at age 70 or older, and 17 percent who do not plan to retire. In contrast, men are more likely than women to expect to retire before age 65.

Expected Retirement Age (percentages)
Expected retirement ages for men-women_TransAmerica 2022 survey graphic

  • Overall, nearly six in 10 women and men (58 percent) plan to work after they retire, either full-time or on a part-time basis.

Most are not saving enough: Many Americans are not saving enough to retire comfortably. Again, women are falling even further behind here.

Women workers have saved only $43,000 (estimated median) in all household retirement accounts.

However, retirement savings do increase with age. The estimated median savings by generation are $26,00 for Generation Z women; $29,000 for Millennial women; $51,000 for women in Generation X; and $101,000 for Baby Boomer women.

These small savings amount explain why, per the survey, women who plan to work past age 65 and/or in retirement say their reasons are prompted more by financial concerns than by health issues.

The top three monetary reasons these women say they'll stay on the job after they can retire are:

  1. Wanting the income (51 percent),
  2. Concern that Social Security will be less than expected (37 percent), and
  3. Not being able to afford to retire (35 percent).

Women's financial challenges: The survey results are not that surprising, given financial challenges women have traditionally faced due to the gender pay gap and losing earning years to parenting and caring for older relatives. The coronavirus pandemic exacerbated those factors.

"Women are at even greater risk than men of not achieving a financially secure retirement due to societal headwinds including the persistency of the gender pay gap, time out of the workforce for parenting and caregiving, and less access to employer and government benefits," said Catherine Collinson, CEO and president of Transamerica Institute and TCRS.

"Emerging from the pandemic, we must spotlight women's longevity and their retirement insecurities. Now is the time to implement solutions so that all women can retire with dignity," added Collinson.

How to improving women's retirement outlook: The survey also offers recommendations on how to help women improve their financial security and comfortable retirement outlooks.

Suggested public policy actions include —

  • Social Security and Medicare reforms to ensure the federal programs' sustainability.
  • Implement further reforms to expand access to workplace retirement plans, increase incentives for employers to offer plans, and facilitate retirement savings among women.

In the private sector, employers should —

  • Ensure gender pay equity.
  • Expand workplace retirement and health and welfare benefits offerings for all employees, including both full-time and part-time workers.
  • Offer flexible work arrangements, which can help all employees with work-life balance, and potentially enable them to stay in the workforce amid competing demands.

Individuals also are encouraged to take steps to boost their financial well-being. The survey urges women to take greater control over their future by gaining a full understanding of their situation, creating a financial plan, setting goals, factoring financial implications of taking time out of the workforce, and developing a retirement strategy.

"As we emerge from the pandemic, we have an unprecedented opportunity to bridge gender inequalities during a woman's working years and her retirement," Collinson said.

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