March is Women’s History Month in the U.S.! This month is dedicated to reflecting on the often-overlooked contributions of women to history in countless fields. The 2022 Women’s History Month theme is “Women Providing Healing, Promoting Hope.” This theme is “both a tribute to the ceaseless work of caregivers and frontline workers during this ongoing pandemic and also a recognition of the thousands of ways that women of all cultures have provided both healing and hope throughout history.”
Women have made incredible progress in attaining education and career advancement in recent decades. According to the Department of Labor, the number of women in the workforce has nearly doubled since 1950. And going into 2020, women held 50.04% of American jobs. (That percentage has decreased during the pandemic.)
However, despite this progress, the wage gap is still 82.3% as of 2020. Women are also twice as likely to work part-time. Traditionally, women are more likely to pause their careers for parenting and caregiving, which impacts not only their earnings but also their retirement savings. The pandemic has exacerbated this trend, increasing the number of women who have stopped or paused working or are considering stepping out of the workforce.
Because of those factors and others, women typically have less financial security than men, especially when it comes to retirement. It is important for employers to take steps to reduce the impact of these potential financial shortfalls so women aren’t as affected at retirement age.
In honor of Women’s History Month and to help close the gap, we are sharing highlights from “10 Ideas to Improve the Retirement Outlook of Women” by Catherine Collinson, a feature in our September 2021 issue of Benefits Magazine . Collinson shared 10 practical guidelines that employers could implement that can be helpful to all employees and specifically beneficial to improving the long-term financial security of women.
1.Offer a 401(k) Plan
401(k) or similar plans are very effective in encouraging workers to save for retirement. New retirement plan programs are available for smaller employers, and some states have enacted retirement savings programs.
2. Extend Retirement Plan Eligibility to Part-Time Employees
Women are more likely than men to work part-time. Extending retirement savings options to part-time employees could help improve women’s retirement savings outcomes. Consider reducing restrictions and exploring alternates to traditional 401(k) plan.
3. Provide and Promote Retirement Planning Tools and Resources
Employers can check with benefits advisors/retirement plan providers to determine whether their female employees are utilizing the tools available. Develop communications/campaigns to encourage the use of (often complimentary) retirement education resources.
4. Promote the Saver’s Credit
This is a federal tax credit for middle- and lower income taxpayers who save for retirement. Because of the gender pay gap, women are more likely to meet the requirements of the Saver’s Credit and, unfortunately, less likely to be aware of it. Employers can work to increase awareness of this tax incentive.
5. Take a More Holistic Approach by Offering Financial Wellness Resources
Financial wellness programs are an increasingly offered employee benefit. Employers can add these resources to support all employees—and especially female employees who statistically face challenges that make saving for retirement more difficult.
6. Offer Other Health and Welfare Benefits
Workplace wellness programs and employee assistance programs (EAPs) can be even more helpful to women, who are often more financially vulnerable than men.
7. Facilitate Alternative Work Arrangements
Women are more likely than men to stop traditional employment for parenting and caregiving, and that pause in employment also removes their access to employer-sponsored retirement benefits. Offering alternatives like flexible schedules, remote work and the ability to switch from full-time to part-time and back can help women maintain retirement benefits.
8. Support Caregivers
Thirty-eight percent of working women are or have been caregivers, and that number is expected to increase. Employers can support caregivers and increase productivity by providing resources to help employees balance the stress of caregiving.
9. Offer Pre-retirees Greater Assistance in Transitioning Into Retirement
All workers facing retirement need to make complex decisions. Since women statistically have typically saved less than men, they need even more support to make informed retirement decisions. Employers can work with plan providers to provide resources and education. Additional education on claiming Social Security would also be helpful. Flexibility in offering preretirees the option to move to part-time work or a less demanding role would also support the financial health of female employees.
10. Be an Age-Friendly Employer
Part of being a diverse, equitable and inclusive organization should include age-friendly employment policies. Examples include age-inclusive recruiting and training, flexible work arrangements and phased retirement. Additionally, providing opportunities for women to work longer can help overcome retirement saving shortfalls.
Women’s History Month is certainly a time to reflect on the achievements and perseverance of women while acknowledging that progress is still needed to achieve equal representation, compensation and financial stability for women in the workforce. Employers can have a significant influence on improving these outcomes.
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