Gender pay gaps and part-time jobs make retirement planning and saving harder for women.
Planning and saving for retirement is a challenge for men and women alike, but recent studies suggest that women may face additional obstacles that could hinder their ability to live comfortably in retirement.
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1. Women are more at risk of a financially insecure retirement
Women face a greater risk than men of not achieving a financially secure retirement, resulting in “far less” in total household retirement savings than men, according to “Retirement Security: A Compendium of Findings About U.S. Workers,” a report from the Transamerica Center for Retirement Studies (TCRS).
Obstacles women face when it comes to saving for retirement include the gender pay gap and a lower chance of being offered employer retirement benefits, since women are more likely to work in part-time jobs that leave them ineligible for an employer-sponsored retirement plan.
Another big factor: Many women must take time out of the workforce for parenting and caregiving, which reduces their ability to consistently save for retirement.
2. Many women doubt they can retire comfortably
Only about 20% of women surveyed said they are “very confident” that they’ll be able to fully retire and live comfortably in retirement, according to the TCRS report. And 16% said they weren’t “at all confident” that they can enjoy a comfortable retirement.
3. Plenty of women plan to work past retirement age
Around 56% of women surveyed plan to continue working at least part-time after age 65 or not retire at all, with 81% citing financial reasons for staying in the workforce, according to the TCRS report.
4. Most women don’t have a written retirement strategy
Only 19% of women surveyed said they have a written retirement strategy amid the pandemic, according to “Women and Retirement: Risks and Realities Amid COVID-19,” a separate TCRS report. “Of concern, 39 percent of women do not have any strategy at all, which is significantly more than the 25 percent of men,” according to the report.
5. COVID-19 affects women’s ability to save for retirement
More than half of women workers’ reported their employment situation was impacted by reduced work hours (24%), layoffs (16%), reduced salaries (13%), furloughs (13%) and/or early retirement (4%) as a result of the COVID-19 pandemic, according to the “Women and Retirement” TCRS report.
As a result, saving for retirement for many women temporarily takes a back seat to covering monthly expenses. “Many women are confronting pressing short-term priorities that may take precedence over saving for retirement,” said Catherine Collinson, president of Transamerica Center for Retirement Studies and one of the authors of the report.
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6. Women have a lower retirement income than men
When compared with men’s retirement income, women receive only 80% of the retirement income most men receive, according to “Still Shortchanged: An Update on Women’s Retirement Preparedness,” a report by the National Institute on Retirement Security (NIRS).
The disparity likely stems from the gender pay gap, since women’s median household income during employment is around 83% of what men earn, according to the report.
Published by Debt.com, LLC