The COVID-19 pandemic has rocked women’s retirement planning
confidence, according to a Nationwide Retirement Institute survey.
The survey found that nearly one in five women (18%) report
feeling like they’re on the wrong track for retirement, and the same percentage
expects to delay the retirement date they originally planned because of the
pandemic.
The economic impacts of the pandemic from lost income are
widespread, but women were more likely to be laid off or furloughed during the
COVID-19 crisis. Gender pay disparities, time out of the workforce and
disproportionate caregiving responsibilities for elders and children were
longstanding challenges to women’s retirement preparedness prior to the onset
of the pandemic.
“Working through the pandemic hasn’t been easy for anyone,”
says Amelia Dunlap, vice president, retirement solutions marketing at
Nationwide. “This is particularly true for women, who are balancing child or
elder care challenges and career burnout. This only adds to the stress that
women are facing, feeling off course from their overall financial and
retirement goals.”
The survey found that fewer women than men have achieved
their financial goals because of the pandemic. Results show that 50% of women
versus 58% of men are contributing to a 401(k) or individual retirement account
(IRA); 47% of women are building an emergency fund, compared with 59% of men;
and 39% of women are increasing retirement contributions versus 51% of
men.
With the challenges for women front and center, plan
sponsors are taking notice, with 70% saying female participants are more likely
to have been financially impacted by the pandemic than men.
Many of the survey respondents expressed experiencing
negative emotions when thinking about retirement planning, including worry
(34%) and frustration (15%).
Women are also more interested (48%) in exploring in-plan
guaranteed lifetime income investment options than any other option offered.
To help fill some of the gaps female participants might face
in saving for retirement, in July, U.S. Senator Patty Murray, D-Washington,
chair of the Senate Health, Education, Labor and Pensions (HELP) Committee, and
Representative Lauren Underwood, D-Illinois, reintroduced the Women’s
Retirement Protection Act of 2021 (WRPA).
And as female participants act to bolster their retirement
readiness, plan sponsors are presented with an opportunity to educate
participants on available in-plan options, Dunlap adds.
“As employees are setting goals for the new year, plan
sponsors have an opportunity to explore solutions that help their female
participants—and all participants—retire on time with confidence, such as
guaranteed lifetime income investment options,” says Dunlap. “However, in
addition to considering their investment option lineup, our survey reveals that
plan sponsors must also include educational offerings to ensure participants
have the tools they need to address lack of knowledge and confidence.”
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