Women face persistent headwinds as retirement challenges mount

• Key Insight: Learn how caregiving and pay gaps systematically undermine women's retirement readiness.  
• What's at Stake: Rising caregiving demands could increase employer pension liabilities and retirement insecurity.    
• Supporting Data: Nearly 40% prioritize paying credit‑card debt; 36% struggle covering basic living expenses.  
• Source: Bullets generated by AI with editorial review

Despite making significant progress in the workplace over the last century, women still lag behind their male counterparts in one key area: planning for retirement. 

A new report by the Transamerica Center for Retirement Studies and Transamerica Institute outlines some of the unique challenges that women face when preparing for life after work. They include lower pay and having to take time out of the workforce for parenting and caregiving. 

Transamerica Institute

"Women are vulnerable to financial setbacks," says Catherine Collinson, Transamerica Institute's CEO and president. "When disaster strikes, if they don't have adequate emergency savings or insurance protections, their options may be limited to either tapping into retirement accounts or taking on high-interest rate credit card debt." 

The report found that nearly four in 10 women cite paying off credit card debt as one of their financial priorities, while 36% of women workers are just trying to get by to cover basic living expenses. 

Read more: Navigating retirement insecurity with the right workplace benefits

Caregiving also continues to shape women's futures: Of the 43% of women workers who are currently or have previously served as a caregiver, eight in 10 say they made work-related adjustments as a result. 

Collison recently spoke about these challenges and how benefit leaders can help women prepare for retirement. This interview has been edited for length and clarity. 

What are some of your main takeaways from this new report? 

Having conducted research on women in retirement for 20 years now, some of the striking findings are that women continue to face headwinds as it relates to saving, investing and planning for retirement. We know that the gender pay gap is slowly closing, and there's also the time out of the workforce for parenting and caregiving. We're also expecting an increase in caregiving as more and more aging parents are calling on their adult children to help provide care. The other thing that the research shows is there are action steps that are within reach for many women that could help them improve their retirement outlook. I'm a firm believer that small steps can lead to big gains in the long term. 

How can benefit leaders help women prepare for retirement?

The first thing benefit leaders can do is recognize the unique challenges women are facing and tailor communications and offerings in a way that resonates with women so they take full advantage of the benefits that are available to them. People are unaware of the benefits that are offered until they really need them. I'll give you a personal case: Twenty years ago I was a caregiver for my grandmother and I was tearing my hair out trying to find backup eldercare,  doing late-night web searches and getting nowhere. And then one of my co-workers said, "Catherine, the company has an employee assistance program. They have referrals, and they can do that research for you." I contacted them and within 24 hours they had researched and done due diligence on three different local agencies that I could choose from.

Read more: A trifecta of solutions to close the retirement-savings gap

What's the biggest mistake people make in planning for retirement? 

Retirement plan providers offer planning resources, and yet around half of women are still guessing at how much they need to save for retirement. The guess rate is high among men too. How can you possibly chart a course if you don't have a destination in mind? How do you even know you're headed in the right direction? I see that as the biggest mistake. 

Read more: Anxiety drives Americans to claim Social Security early

If you were asked to design a benefits package to support women's long-term financial security, what are a couple of components that you would insist on including in that plan? 

One of the things that would be extremely helpful for women are benefits related to parenting and starting a family. That could be anything from fertility treatments to backup daycare and backup eldercare. Another thing that can be helpful is talking about how to save for different things at the same time. Saving for retirement doesn't have to be mutually exclusive of saving in your HSA or saving in a 529 for your child's college education. Flexible work arrangements are all also critical these days, especially for women and men who are parenting and caregiving. The ability to switch from full time to part time and back based on life circumstances can be a win-win for both the employees and for employers, because there is a cost associated with recruiting and training and onboarding new people.