Select Findings from the 20th Annual Transamerica Retirement Survey of Workers
2020 marked the 100th anniversary of women’s right to vote in the U.S. Since then, women have made great strides in educational achievement and career opportunities. Despite this progress, they continue to be at greater risk than men of not achieving a financially secure retirement. Women and Retirement: Risks and Realities Amid COVID-19 examines women’s finances before and during the pandemic, and their expectations about retirement. It is based on findings from the 20th Annual Transamerica Retirement Survey, which comprises a supplemental survey conducted in June 2020 and a broader survey conducted in late 2019.
These 20 facts are intended to promote awareness of the hazards that women face while also highlighting options for them to enhance their retirement from Fortune 500:
1. Only 17 percent of women are “very confident” that they will be able to retire with a comfortable lifestyle.
2. 24 percent of women say their confidence in their ability to retire comfortably has declined in light of the coronavirus pandemic.
3. 18 percent of women have already and/or plan to take a loan and/or withdraw from their 401(k), 403(b), or similar plan as a result of the coronavirus pandemic.
4. Paying off debt is a financial priority for a majority of women (59 percent). Only 50 percent of women cite saving for retirement as a priority.
5. 70 percent are saving for retirement through their current or former employer’s retirement plan and/or outside the workplace.
6. Few women (19 percent) have a written retirement strategy, but more (42 percent) have an unwritten strategy.
7. Few women (22 percent) frequently discuss saving, investing and planning for retirement with family and friends.
8. Some women are not being proactive enough to work past age 65. Only 56 percent say they are staying healthy, 46 percent are focused on performing well at their current job, and only 41 percent are keeping their job skills up to date.
9. Slightly more than half of women are taking key steps to protect their long-term health, including eating healthfully (58 percent), seeking medical attention when needed (55 percent), exercising regularly (54 percent), and getting plenty of rest (53 percent).
10. Women are dreaming of an active retirement, including traveling (67 percent), spending more time with family and friends (57 percent), pursuing hobbies (44 percent), volunteering (27 percent), and working (27 percent).
11. More than half of women (54 percent) expect to retire after age 65 or do not plan to retire, and plan to work after they retire (56 percent), either full-time (15 percent) or part-time (41 percent).
12. Among women who plan to work past age 65 and/or in retirement, more cite doing so for financial reasons (81 percent) than healthy-aging related reasons (76 percent).
13. 38 percent of women are or have been caregivers, and nearly all of the caregivers made some work-related adjustments as a result of caregiving, such as using sick/PTO days (36 percent) and missing work (36 percent).
14. 40 percent of women use a professional financial advisor to help manage their retirement savings and investments.
15. 28 percent of women expect Social Security to be their primary source of retirement income.
16. 64 percent of women are offered a 401(k) or similar employee-funded retirement plan. However, 27 percent of women work part-time so are less likely to have workplace retirement benefits.
17. Among women who are offered a 401(k) or similar plan, 75 percent participate in the plan and they contribute 10 percent (median) of their salary to the plan.
18. Women’s total household retirement savings is only $28,000 (estimated median).
19. Women believe that they will need to save $300,000 (median) in order to feel financially secure in retirement; among those who estimated their savings needs, 51 percent say they “guessed.”
20. Just 35 percent of women are aware of the Saver’s Credit, a tax credit for saving for retirement.
Assess your current financial situation and create a budget that includes income, living expenses, paying off debt, and financial goals such as building emergency savings and long-term retirement savings.
If possible, save for retirement. By starting early and saving consistently, even small amounts can add up over a decades-long working life. If your employer offers a retirement plan, participate and take advantage of any matching contributions. Learn if you are eligible for the Saver’s Credit, an IRS tax credit for saving for retirement. This tax credit has proved very beneficial for many of our female, Fortune 500 clients.
Develop a retirement strategy and write it down. Envision your future and use an online calculator to estimate your retirement income and long-term savings needs. Formulate a goal for how much you need to save – and hold yourself accountable.
Avoid taking loans and early withdrawals from retirement accounts, which can severely inhibit their long-term growth. Before tapping into retirement savings, explore all possible alternatives to determine the best option. Early withdrawals from retirement accounts has proven very costly to many of our female, Fortune 500 clients.
If faced with parenting or caregiving responsibilities, carefully consider any changes to your work.
To help mitigate the impact on your long-term financial security, explore options such as shifting to part-time work.
Maintain your ability to continue working as long as you desire. Keep your job skills up to date and learn new ones. Many classes are available online to learn new technologies and obtain career advice. Consider joining online networking groups. Any Fortune 500 individual should practice this strategy as you never know when it will become financially necessary to go back to work.
Become personally involved in your family finances including budgeting and long-term planning.
Discuss retirement planning with family and close friends.
Get educated about retirement investing and strategies for drawing down savings in retirement. Learn about types of retirement accounts, asset allocation, and dollar-cost averaging. Become knowledgeable about retirement income, including the best time to start receiving Social Security.
Have a backup plan in the event of unforeseen circumstances such as separation, divorce, loss of a partner, or being unable to work before your planned retirement. Consider emergency savings and insurance products.
The Retirement Group is a nation-wide group of financial advisors who work together as a team.
We focus entirely on retirement planning and the design of retirement portfolios for transitioning corporate employees. Each representative of the group has been hand selected by The Retirement Group in select cities of the United States. Each advisor was selected based on their pension expertise, experience in financial planning, and portfolio construction knowledge.
TRG takes a teamwork approach in providing the best possible solutions for our clients’ concerns. The Team has a conservative investment philosophy and diversifies client portfolios with laddered bonds, CDs, mutual funds, ETFs, Annuities, Stocks and other investments to help achieve their goals. The team addresses Retirement, Pension, Tax, Asset Allocation, Estate, and Elder Care issues. This document utilizes various research tools and techniques. A variety of assumptions and judgmental elements are inevitably inherent in any attempt to estimate future results and, consequently, such results should be viewed as tentative estimations. Changes in the law, investment climate, interest rates, and personal circumstances will have profound effects on both the accuracy of our estimations and the suitability of our recommendations. The need for ongoing sensitivity to change and for constant re-examination and alteration of the plan is thus apparent.
Therefore, we encourage you to have your plan updated a few months before your potential retirement date as well as an annual review. It should be emphasized that neither The Retirement Group, LLC nor any of its employees can engage in the practice of law or accounting and that nothing in this document should be taken as an effort to do so. We look forward to working with tax and/or legal professionals you may select to discuss the relevant ramifications of our recommendations.
Throughout your retirement years we will continue to update you on issues affecting your retirement through our complimentary and proprietary newsletters, workshops and regular updates. You may always reach us at (800) 900-5867.
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