How advisers can bridge the retirement planning gap with women

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As a benefits adviser, it is generally good advice to provide employers and employees with targeted financial information for their company-sponsored plans. And for advisers who work with female plan participants, issues that impact the retirement gap should be central as clients plan for retirement and evaluate their 401(k) plans.

Due to gender wage gaps and life expectancies, women must prepare differently to accommodate the obstacles they face along the way to retirement. The so-called retirement gap represents the need for savings to last for a longer retirement period despite some well-known challenges to accrue as much retirement savings as their male counterparts.

The gender pay gap in 2017 was around 20%, which means that female full-time workers made only 80.5 cents for every dollar earned by a male.

Even if the wage gap narrows throughout a woman’s working years, their long-term savings might be significantly lower compared to a male. Additionally, life expectancy for women was 81.1 years compared to 76.1 years for men in 2016. This five-year discrepancy indicates most women are expected to outlive men. Therefore, they will spend more years in retirement.

Another factor to consider with female plan participants is the generalization that women do not directly engage in financial planning or tend to default to a spouse’s plan. If this rings true with the employees you work with, it may be important to provide additional education to increase understanding.

Informed participants can lead to more confidence in retirement planning among both genders. Newsletters, annual employee meetings and presentations enable you to stay connected with employees and build their financial confidence. Continue to use established communication methods and integrate new techniques.

Benefit advisers should be conscious of how they present information to plan participants and evaluate their options to provide support for female employees. For instance, advisers can establish a meeting with all female employees to provide tailored advice for the obstacles they face. Advisers should also discuss the retirement planning gap and the reasons behind the challenges women experience. While a potentially sensitive topic, open communication is essential to promote understanding and build trust.

The ability to advise women as a demographic will elevate your brand perception and demonstrate your comprehensive planning capabilities. If you acknowledge the obstacles women face and help present realistic techniques to mitigate challenges, you can build trust and potentially extend the client-adviser relationship beyond benefits planning. While not the primary goal, some plan participants may engage with you for individual financial planning if you have been a trusted resource in the past.

Additionally, when women become widows, up to 70% leave their adviser in the following months and years. This tendency presents another added benefit for those who work with female plan participants. If you are able to establish your credibility throughout the years you work with them on company-sponsored plans, they may think of you for financial guidance in this time of need.

Benefits planning is a complex concept as advisers encounter a wide variety of demographics, personalities and financial skills. We can be helpful with the financial well-being of large and diverse groups of employees who place high levels of trust in our guidance. Therefore, it is essential to tailor our communication strategies based on our segmented client base. When you consider the prominence of women represented in the workforce, retirement planning for female plan participants is a necessary skillset for benefit advisers to develop.

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Retirement planning Retirement benefits Retirement income Retirement readiness