Understanding Women's Retirement Risks: Key Insights from New Study

The Gender Gap in Retirement Confidence

A new report titled 25 Facts About Women's Retirement Outlook from the Transamerica Center for Retirement Studies (TCRS) has unveiled concerning statistics about how women view their retirement prospects. The study highlights several factors that hinder women's ability to retire confidently and comfortably, showing that only 18% of women workers feel secure about their retirement plans.

Aspirations for Retirement

Women envision retirement as a time for leisure and personal growth. Key aspirations include:

- Traveling (69%)
- Spending time with family and friends (61%)
- Engaging in hobbies (49%)
- Volunteering (26%)

However, these dreams are overshadowed by pressing fears.

Fears Leading to Insecurity

A significant percentage of women express anxiety about their financial futures. The most pressing fears include:

- Outliving their savings and investments (44%)
- The fear that Social Security might not be available (43%)
- Concerns about declining health requiring long-term care (43%)
- Not being able to meet basic financial needs for their families (38%)
- Issues related to cognitive decline (34%)

These fears highlight the vulnerabilities that many women face, which are exacerbated by a history of lower earnings and longer life spans compared to men.

Financial Preparedness

The survey reveals Women's financial priorities clearly tilt towards saving for retirement:

- 53% are focused on saving for retirement
- 45% are building emergency savings
- 39% are managing credit card debt
- Only 19% frequently discuss financial planning with family.

Despite these priorities, the median total savings for women is alarmingly low at $3,000 for emergency needs, revealing a precarious financial cushion.

Women also have different savings behaviors, with 73% saving for healthcare expenses, yet many question their knowledge of how to effectively plan for retirement. Only 16% indicated they possess substantial financial literacy.

Saving Mechanisms and Employer Support

While 79% of women are involved in retirement saving plans, participation varies by employment status. Full-time employees are more likely to have access to 401(k) plans compared to their part-time counterparts (80% vs 50%). For those able to contribute, the average contribution is 10% of salary.
However, 37% of women reported having to withdraw from their retirement savings due to financial hardship, further complicating their preparedness for retirement.

The Role of Financial Awareness

A large number of women (44%) remain unaware of tax credits available for savers, which can offer crucial supports in their retirement planning. With many expecting to retire only after age 65, the need for robust planning becomes all the more evident.

Strategies for Improvement

Catherine Collinson, the CEO and president of TCRS, emphasizes that improving women’s financial outlook requires a multifaceted approach. Employers can enhance benefits and provide more support tailored to the needs of women in the workforce. Policymakers are urged to address barriers that uniquely affect women's retirement savings.

Community Efforts and Shared Responsibilities

Collinson asserts that empowering women in this context is a collective responsibility. Men can also play a pivotal role by supporting women's financial independence and advocating for equitable practices in workplaces.

The TCRS's report serves as a call to action, urging systemic changes that will allow women to not only dream of retirement but also achieve them without financial fear. This ongoing research, now in its 20th year, continues to bring awareness to the challenges women face, urging further dialogue and action towards equitable retirement solutions.