Retirement can be a challenging time for anyone, but several issues unique to women can make it even more difficult. Here are six ways in which women may face increased difficulty in achieving successful retirement outcomes and three things employers can do to address the gap:
- Women often earn less than men
The gender pay gap means that women earn less on average than men, making it harder for them to save for retirement. This can be particularly challenging for women who are single or divorced, as they may not have the support of a partner to help them build retirement savings. - Women are away from work more throughout their working years
Women are more likely to take time off work to care for children or aging parents, which can interrupt their earning potential and make it harder to save for retirement. This is especially true for women who work in industries with lower pay or fewer opportunities for advancement. - Women are more frequently employed part-time
Part-time work can be more flexible and allow for better work-life balance, but it often comes with lower pay and fewer benefits. This can make it harder for women to save for retirement, especially if they cannot work full-time due to caregiving responsibilities. - Women accumulate less in savings and pensions
The combination of lower earnings, more time away from work, and more frequent part-time employment can lead to lower savings and pension accumulation levels for women. This can make it harder for them to retire comfortably and may require them to rely more on Social Security or other sources of income in retirement. - Women more frequently live alone in retirement
Women are more likely to outlive their spouses and live alone in retirement, which can increase their financial burden. Single women may need to pay for all their living expenses, including housing, healthcare, and other necessities. - Women live longer
On average, women live longer than men, meaning they may need to stretch their retirement savings over a longer period. This can make it harder to maintain a comfortable standard of living in retirement, especially if their savings are insufficient.
While employers may have a limited ability to affect all of the issues that may negatively impact retirement preparedness, there are three steps employers can take to reduce the disparity.
- Offer equal pay and opportunities for advancement
Employers can work to eliminate the gender pay gap and ensure that women have the same opportunities for promotions and raises as men. This can help to increase women's earning potential and allow them to save more for retirement. - Provide family-friendly policies and benefits
Employers can offer flexible work arrangements, such as telecommuting or part-time options, to help women balance their caregiving responsibilities with their work. They can also offer paid leave for new parents, which can allow women to take time off work to care for their children without sacrificing their earning potential. - Encourage, or ideally automate, participation in employer-sponsored retirement plans
Employers can work to increase participation in their retirement plans among women, particularly those who are part-time or have taken time off work. Automatic enrollment and re-enrollment significantly reduces any gender or wage gaps in participation rates
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