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.”
The Nationwide survey is available here.