Setting women up for retirement success: Employers need to bridge that savings gap

Americans often face a multitude of financial priorities, from the increasing cost of living and health care coverage to saving for a home, a child’s college education or their own retirement. In recent years, we’ve seen high levels of inflation, which have negatively impacted retirement savings as employees shift their financial focus to paying for more immediate needs. Less than half of employer-sponsored retirement plan participants are contributing at least 10% of their income to their savings, and only a quarter of savers are contributing 15% or more.

As we mark Women’s History Month in March, it’s worth noting that women have been especially impacted by the headwinds retirement savers are facing, with only 18% of working women having more than $250,000 saved for their retirement in their workplace retirement plan, compared to 25% of working men.

Employers can help ensure that all employees are set up for retirement success by acknowledging this gap in saving and bolstering the support they offer their workforce. Research has shown that several factors can make a big difference in overall retirement outcomes and general wellness, regardless of gender:

• Offering personalized support to retirement savers through a dedicated retirement consultantcan help savers plan more accurately for their expenses in retirement; 82% of workers would be interested in working with a retirement consultant through their employer, or already do.
• Help employees plan for favorite pastimes in retirement to more accurately estimate costs and create a savings plan: 52% of workers said having a clearer vision of the retirement lifestyle they’d be able to afford if they increased their saving by a certain amount would motivate them to increase their contribution to their employer’s retirement plan. A conversation with a retirement consultant is a great place to start when planning, not just for everyday living expenses, but also for favorite pastimes in retirement, such as travel, golf or wellness activities.
• Provide access to financial wellness tools, like Lincoln Financial’s WellnessPATH, that can help employees manage student loan debt, navigate surprise expenses and create a plan for managing costs to enable better savings: 38% of workers said having a roadmap for how to reduce debt and establish an emergency fund would motivate them to start or increase their retirement savings.
• Leverage auto-enrollment to boost participation in retirement savings plans: 62% of workers who do not participate in their employer’s retirement plan said they would be likely to remain in the plan if they were auto-enrolled.
• Offer in-plan guaranteed income within an employer-sponsored retirement plan. Interest in an in-plan guaranteed income option is strong, with 68% of workers expressing interest and 35% of participants saying they would increase their contribution if offered a guaranteed income option.

In addition to saving for retirement, managing the expenses that come with daily life and planning for the unexpected are important components of managing a personal financial plan – and employers can help. Fifty-six million women are living with a life insurance coverage gap, leaving them and their families exposed to a potential financial hardship. Offering low-cost, high-value life insurance plans can help women close that coverage gap in an easy, affordable and accessible way.

Group benefits are another often-overlooked component of financial planning. People don’t like to think about the unexpected, leaving employees exposed to incurring high costs in the event of an emergency or unforeseen medical event. With more than 40% of women serving as the sole or primary breadwinners for their families, it’s critical for women to have access to financial protection in the case of accidents, illness or hospitalization. Some of the benefits that can be particularly helpful for women who are supporting families can be:

• Hospital indemnity insurance that includes maternity-related benefits such as NICU coverage, helping new mothers weather an already stressful situation with less financial concern.
• Long-term care planning products and resources, with hybrid funding options that allow women to spread out the costs of long-term care before they need it and enabling them to better manage competing financial priorities.
• Accident insurance with family care benefits that include dependent children and older adults, to help manage the cost of unexpected health events following an accident, such as broken bones.
• Critical illness insurance that covers health assessments and wellness screenings for early detection and prevention.

Related: Closing the 401(k) gender gap? Millennial women are savings more for retirement

The majority of retirement planners (68%) believe they are saving less than what they will need. The good news is that workers are ready to make a change: 83% of workers report that they are ready to reevaluate at least one aspect of life, finances, work or retirement. As such, employees are increasingly looking to their employers for support, and workplace benefits and retirement savings plans provide an opportunity for employers to attract and retain talent, and to care for the financial and overall well-being of their employees. Small changes can make a big difference, both for workers seeking additional help and coverage for their financial future, and for employers seeking new ways to support their employees.

Ralph Ferraro, SVP, is President of Retirement Plan Services, Lincoln Financial Group.