We all find it challenging to adequately plan for a secure retirement. Will we have enough money to live comfortably for the rest of our lives? And be able to throw in a trip or two, keep the house heated, spoil the grandkids and buy a new car?

It’s hard for anyone but, as shown in this report from the U.S. Bureau of Labor Statistics, women face additional challenges.

Speaking generally, women often earn less money than men, on an annual basis and over the course of a lifetime. According to recent findings by the BLS and other organizations, women earn on average about 80% of what men earn. Women are often the primary caregiver in a family, raising children or caring for an elderly parent. As a result, women may spend years working part-time or not working outside the home at all.

Eligibility for a pension or retirement plan is reduced when women work fewer hours and years. Lower income means a lower accrual rate in a traditional defined benefit plan, lower Social Security benefits at retirement, and a lessened ability to save in defined contribution and other retirement accounts.  

Women have a longer life expectancy than men. According to the National Center for Health Statistics, women’s life expectancy is 81 years, five years longer than men’s. This increases the risk that women will exhaust their retirement savings before death. Women are also more likely to become widowed, leaving them vulnerable to economic and health traumas they must weather alone. Research has shown that divorce and widowhood have more pronounced effects for women than for men, likely contributing to higher poverty rates and lower income levels.

Here are some ways plan sponsors can help women achieve a more secure retirement:

Provide education and information

  • Offer in-person guidance, especially on a one-to-one basis, with the opportunity to ask questions and get immediate answers.
  • Provide clear and concise information with straightforward choices.
  • Direct women to resources specifically meant for women (three are listed below).
  • Tailor messaging by age.
  • Educate about the Saver’s Credit and catch-up contributions.
  • Provide information geared to life events, like marriage or the birth of a child.
  • Emphasize the importance of saving early (compounding) and continually increasing the amount saved.
  • Provide retirement planning checklists and calculators.

Make appropriate defined contribution plan design changes.

  • Add automatic features such as auto-enrollment, auto-escalation and rebalancing.
  • Include a lifetime income distribution option.
  • Provide matching contributions.

Plan sponsors can also provide access to employee benefits with a financial component — such as life, disability and long-term care insurance — either on a voluntary employee-pay-all basis or partially employer-funded, as well as offer flexible work choices to keep women employed full-time and benefits-eligible, or employed part-time while retaining tenure.
Additional resources

Social Security is Important to Woman, Social Security Administration


Women and Retirement, Women’s Institute for a Secure Retirement (WISER) http://www.wiserwomen.org 

Women and Retirement Savings, Employee Benefits Security Administration http://www.dol.gov/ebsa/publications/women.html

Julie Stich is director of research with the International Foundation of Employee Benefit Plans.

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