Closing the Retirement Gender Gap -- How Employers Can Help
Despite the fact that women tend to live longer, female workers typically have lower retirement account balances than their male counterparts and they may end up dealing with financial difficulties on their own.
MAILTLAND, Fla., Aug. 24, 2018 /PRNewswire-PRWeb/ -- Women tend to have less saved in their 401(k) and other retirement accounts than men do, which is particularly problematic because they also tend to live longer. Many factors may contribute to this disparity, including lower wages, greater part-time work and time off to care for children and other family members, lower levels of financial literacy, and lower risk/return investment choices. Women tend to outlive their spouses, and they may end up dealing with financial difficulties on their own.
What can be done to help close the retirement readiness gap for women? This question was addressed by one large-scale study.
A Program That EMPOWERs Women
In 2017, the Center for Retirement Research at Boston College examined a multimedia education protocol called Embracing and Promoting Options for Women to Enhance Retirement (EMPOWER). The program intended to boost female employees' retirement savings by offering educational programming and bolstering motivation for contribution. Researchers looked at 31,000 male and female public workers in Wisconsin.
One group of workers got information, motivation and various challenges through multimedia channels including email, webinars and in-person presentations. There was no outside incentive to participate in the study, but they were offered one-on-one sessions to address their own retirement needs.
Data spanning four years evaluated the effect of the EMPOWER program on retirement savings for male and female workers before and after the protocol was initiated, as well as among agencies that did and did not use the EMPOWER program. Results indicate that female workers who participated in EMPOWER boosted their contributions by 2.6%, effectively reducing the gender retirement gap by more than half in this sample.
Employers Can Help
These results suggest that HR departments and retirement program advisors charged with helping workers prepare for retirement possess a potentially powerful weapon in their efforts to help women improve their retirement readiness. By increasing female employees' financial literacy and motivation for higher participation in 401(k) savings programs, organizations may be in a position to help close the financial wellness gender gap significantly when it comes to retirement.
Educational and motivational content may need repeated communication through a variety of channels to create the level of positive change observed in the Wisconsin research study. This is why offering a wide array of educational efforts and tools to assist employees, including in-person group and one-on-one advising and web-based workshops, can be beneficial and help workers to make more well-informed retirement planning decisions. Jamie Ann Hayes, Partner and Consultant at Fiduciary First, remains optimistic but determined: "Plan advisors have more tools then ever to help bridge the gap for female participants, but we're not there yet."
Resource:
http://crr.bc.edu/wp-content/uploads/2017/09/wp_2017-12.pdf
SOURCE Center for Retirement Research
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