Closing the Retirement Income Gender Gap: The Opportunity is Now
Mar 14, 2018employers,retirement planning,financial wellness,employee benefits,workplace based-plans,benefits planningSA-Articles
There are a variety of challenges that working women face which may impede their ability to save enough for retirement.
Women’s retirement account balances are on average 1/3 lower than men.
Employers can help close the retirement income gender gap through improved benefit design.
The challenge: A secure retirement for women. In this paper, research shows that women, on average, are lagging their male counterparts in their quest to achieve a secure retirement due to multiple factors, including:
Longer life expectancies
The likelihood that many will be single at some point during retirement
Time constraints due to roles as workers (both paid and unpaid) and caretakers
On average, earning less than men
Carrying more debt at both millennial and pre-retirement ages than prior generations
Not prioritizing planning for retirement
The opportunity: Plan sponsors can help close the retirement income gender gap through customized plan design, participant engagement programs, and holistic education that focuses on participants’ financial wellness. Suggestions include:
Utilizing automatic enrollment – and enrolling at higher rates
Using target-date funds as a default investment option
Introducing guaranteed lifetime income options
Expanding education programs to focus on financial wellness
Making support resources relevant and accessible
Leveraging technology to amplify retirement priorities
Prudential’s research study offers employers actionable steps for improving RTW outcomes. The paper focuses on thought processes that play a role in employees’ return to work and productivity. What’s more, it provides employers with best practices to help employees overcome psychological hurdles and successfully return from disability.
Prudential’s research sheds light on employees’ self-assessment of their financial wellness. Among the findings: an alarming 57% of employees are very or somewhat stressed about their financial situation. Fortunately, employers can help employees achieve financial security and wellness.
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