Question: We are working with our advisor to address the specific needs and unique circumstances of our women employees. Are there any recent trends to be aware of to help us frame our approach?
Answer: According to a December 2022 report from the U.S. Government Accountability Office, women still earn an estimated 82 cents for every dollar men make. Not only does that mean women likely earn less in their lifetimes, they also have less income to put toward retirement. In addition, a new study by 401(k) platform Guideline found women report feeling more overwhelmed and less in control toward their retirement savings than men (48% vs. 27%). They were also likelier to experience feelings of frustration (31% vs. 21%), intimidation (30% vs. 18%) and confusion (22% vs. 9%). As a result, fewer women are saving for retirement than men (69% vs. 80%). In addition, 55% of men save more than 10% of their income, whereas only 36% of women claim the same. The survey also found that women are nearly twice as likely as men to self-identify as novice investors.
The survey points to fundamental plan features for employers to have in place to begin closing the gender gap: automatic features with a robust employer match, along with tools and resources to help improve financial wellness. Targeted educational campaigns that focus on boosting retirement savings literacy and confidence with the overall retirement planning process should also be considered. In addition, a recent LIMRA survey indicates that women who work with a financial professional are much more likely to complete several retirement planning tasks that are recommended to bolster retirement readiness.
