First quarter studies show that women are rowing hard to gain financial ground after the disruptions of 2020. The trends provide retirement plan sponsors with valuable insights to inform plan design and communications.
Expect The Unexpected
E*Trade’s recent study on retirement savings among women found that fewer than one in three had made early withdrawals on retirement accounts—down ten percentage points from this time last year. When women have had to make early withdrawals, the top two reasons are to pay for medical expenses and education costs. In the meantime, 36% of women investors are contributing more to retirement accounts and 27% are paying down personal debt. These are hard-won signs of progress, as 401k Specialist reports:
“Amid an incredibly disruptive year, it’s encouraging to see female investors thinking long-term and putting more away for their future selves,” said Deniz Ozgenc, Executive Director of Financial Product Management at E*TRADE Financial.
“The pandemic has taken a major toll on us all, so it’s no small feat to prioritize retirement and rebound from the challenges this year brought on,” Ozgenc added. “But if the pandemic has taught us anything, it’s to expect the unexpected—and putting a little away now can help ease the burden when times get tough.”
Amidst the signs of progress, there are still of course challenges looming large for women on the path to retirement: obstacles related to the cost of health care are identified by 47% of women and housing costs (rent/mortgage) by 41%.
In support of healthy retirements for all, retirement plan sponsors across the country are strategizing about how to begin or increase matching contributions from employers. Other actions to increase savings include: enabling automatic enrollment in the retirement plan; expediting part-time worker participation; and, providing “catch-up contribution” opportunities for employees 60 and older.
As you continue doing everything you can to encourage employee retirement saving, don’t forget to protect the hard-earned savings in the retirement plan—and your own, as a plan fiduciary.
Colonial Surety Company’s unique, comprehensive and affordable packages arm plan sponsors with: the ERISA bond required to protect the assets of the retirement plan from theft; Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach; and, Fiduciary Liability coverage to protect you and your assets from personal liability.
Creating More Positive Outcomes
While women in the workforce are starting to make up some of the financial ground lost last year, many are out of the workforce looking to regain footing . For example, the Lincoln Financial Group’s 2021 Consumer Sentiment Tracker found:
“The research demonstrates that the pandemic has accentuated the gender income gap. Millions of women left the workforce in the last year not only due to job loss, but because of caregiving responsibilities at home,” said Kristen Phillips, senior vice president, Corporate Marketing, Communications and Strategy at Lincoln. “As a result, many are living paycheck-to-paycheck with minimal savings, unsure of how to prioritize retirement and their long-term financial outlook too. As an industry, we have an opportunity to help provide women with the tools and knowledge that will enable them to create more positive outcomes.”
There is no doubt that employer-sponsored retirement plans are critically important for workers. Let Colonial Surety Company help you protect the funds—and yourself as a fiduciary. Colonial’s user-friendly, digital and direct service makes it quick and easy for you to secure a comprehensive and affordable coverage package designed especially for plan sponsors. A national leader in the field, Colonial Surety Company is not only US Treasury listed, but also rated “A Excellent” by A.M. Best Company.