Women, especially those who have kids or carry more debt, are not saving enough for retirement. In fact, financial experts say this lack of preparation for their senior lives contributes to the country’s retirement crisis, which will be acutely felt by women. However, employers can help their female employees close the retirement gap.
Women working full-time, on average, make 79 cents to the man’s dollar — women of color make significantly less — and are
Those lower wages, in turn, create a shortage of Social Security benefits and 33% less money in a woman’s 401(k) account, according to the report.
“It’s a little bit of [a] perfect storm,” says Janice Co, head of strategy and marketing, retirement, at Prudential Financial. “That’s what you’re seeing with the wage gap and women leaving the workforce, which is impacting Social Security. It isn’t these items in isolation.”
The lower wages and lack of savings for retirement also present a turnover challenge for employers. “People don’t retire,” Co says. “There’s a real cost to an organization.”
In all, the median annual income of women age 65 and older is 42% lower than men, according to the report.
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To minimize the gendered retirement gap, employers should focus on building out their financial wellness program, says Co. “There’s real cost to employers when workers are under
Similarly, one in six employees describe themselves as
Employers should also leverage their digital capabilities to help women envision their life in retirement, which is likely to include being single and carrying debt, says Co.
Companies can use
“Prudential has client engagement campaigns that have a component of email,” she says. “We also have counselors that will go on site and work with people face-to-face.”
The report also recommends that employers offer guaranteed lifetime income options to women, who benefit a bit more from these offerings, Co says.
“An extra 1% earlier in their career for a longer period of time: That will make a huge difference in preparing for retirement,” she says. “Women take care of so many other people. [We need to tell them to] take care of yourself.”