The pandemic has shaken women’s confidence in retirement planning according to a recent Nationwide Retirement Institute survey of employer-sponsored retirement plan participants and sponsors. About one in five (18 percent) women feel they are on the wrong track for retirement. The same percentage expects to retire later than they originally planned due to the pandemic.
Fewer women than men have been able to hit financial milestones, such as:
- contributing to a 401(k)/IRA (50 percent of women vs 58 percent of men)
- building an emergency fund (47 percent of women vs 59 percent of men)
- increasing their retirement plan contributions (39 percent of women vs 51 percent of men)
Retirement plan sponsors have taken notice of these challenges, too. Seventy percent say they believe female participants are more likely to have been financially impacted by the pandemic than men. A major factor could be family responsibilities. One in three women reported that they had thoughts of leaving their jobs or downshifting their careers in 2021. This is in comparison to one in four in 2020.
Retirement uncertainty is causing women anxiety
As a result of these factors, many women are experiencing negative emotions when thinking about their current retirement plan status:
- 34 percent report feeling worried
- 15 percent report feeling frustrated
- 10 percent report feeling panicked
These percentages are even higher for women who have delayed or canceled their retirement plans. In that case, 45 percent feel worried, 54 percent frustrated and 16 percent panicked. In fact, 51 percent of women who have delayed or canceled their retirement plans say the decision has negatively affected their mental health.
“Working through the pandemic hasn’t been easy for anyone. This is particularly true for women, who are balancing child or eldercare challenges and career burnout,” said Amelia Dunlap, vice president, Retirement Solutions Marketing at Nationwide. “This only adds to the stress that women are facing, feeling off course from their overall financial and retirement goals.”
Women can take control of their retirement planning
The good news is women are turning their energy into action. Since the pandemic began, 66 percent of plan sponsors have noticed that women are more likely to make changes to their retirement plans than men. Of the women who are expecting to delay or cancel their retirement plans, 67 percent say they’ve shifted their overall approach to saving for retirement in response.
The survey found women are also interested in exploring solutions that can help them reach their goals. About half (48 percent) of female participants showed interest in in-plan guaranteed lifetime income investment option, more than any other option provided to them. About one in three (35 percent) are likely to roll over their retirement savings into one if given the chance. The female participants who don’t contribute to a guaranteed lifetime income investment option say that their biggest barriers stem from a lack of knowledge.
“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,” continued Dunlap. “However, in addition to considering their investment option line-up, 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.”
View an infographic of the survey data.
Nationwide offers a list of considerations to help plan sponsors, consultants and advisors get conversations about in-plan guarantees started. The company offers additional resources for the small business 401(k) market and institutional/government market.
Nationwide Retirement Solutions administers nearly 34,000 retirement plans. The company protects more than $173.9 billion in participant assets. It has helped secure financial futures for more than 2.6 million participants in the governmental 457, corporate 401(k) and not-for-profit 403(b) markets. Nationwide is committed to serving the retirement industry by doing the right thing at the right time through better participant experiences, administrative simplicity and values that translate to service.
Edelman Data and Intelligence (DxI) conducted the online survey on behalf of Nationwide July 19-August 4, 2021. Respondents included:
- 500 company plan sponsors, including business executives, business owners, human resources professionals and financial management professionals who are full-time workers at U.S. businesses with at least 10 full-time employees. They must also be decision-makers for company retirement plans including 401(k), 403(b), or 457(b) plans.
- 300 financial advisors or consultants who advise at least one plan sponsor on investment decisions, financial planning, and options.
- 1,000 plan participants 45+ years who work full-time and have a 401(k), 403(b) or 457(b) plan through their employer.
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Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products. These include auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com.