ERISA

Worried About Retirement: Women!

04.03.2024

 

Several research projects this year have concluded with this “discovery”: women are generally more worried about financing their retirements than men. Ironically, that these findings still come as “news” underscores the depth of the challenges to be solved. Perhaps pay-gaps and caregiving responsibilities are contributing factors? 

Unique Challenges

According to the Nationwide Retirement Institute, nearly 25% of women actively participating in employer sponsor retirement plans “believe they are off track for retirement compared to 15% of men” and, further:“52% are worried they will outlive their anticipated longevity. Another 41% say they have a negative or neutral outlook on retirement planning, relative to 29% of men.” Referring to the “financial vortex” faced by women, additional research by Goldman Sachs lays out how “personal challenges,” such as caregiving responsibilities, are actually economic challenges. Indeed, the firm’s investigation into “the unique challenges women face in saving for retirement, from gender gap differences and caregiving responsibilities to longer life expectancies,” found that “income disparities could potentially lead to a 24% loss in retirement savings for women”:

According to the survey, 61% of families in the U.S. have their caregiving managed by a woman, and 40% of women leave their jobs for caregiving responsibilities, whether for childcare or eldercare. Furthermore, 21% have left a full-time job for part time work to fulfill their caregiving roles, and women are twice as likely as men to leave the workforce for over a year. When asked about the causes that impact their ability to save for retirement, caregiving and financially supporting family members was one of the top reasons among caregivers (78%), after monthly expenses (80%) and financial hardships (79%).

Findings from New York Life’s Wealth Watch further clarify the challenges women face when trying to plan for retirement. Although women tend to handle the day to day money matters of households confidently, many, have trepidation when it comes to other aspects of financial planning:

New York Life’s study found that women primarily handled paying bills, monthly budgeting, and financial account management, whereas men were in charge of choosing and maintaining a relationship with a financial advisor, financial account management, managing household investments, managing retirement savings, and purchasing financial products like insurance, annuities, mortgage, etc. Women in this study reported wanting more information, with 82% saying they wish they know at least one financial topic, including building wealth (29%) and saving for retirement (25%). While more say they would prefer to get financial advice from a professional, the study shows that younger women are obtaining financial help—a promising movement.

Tailored Solutions

Retirement plan sponsors and service providers have been leaning in to make sure women can access tailored financial guidance, and signs of progress are emerging: “Gen Z and Millennial women report having received formal financial literacy education at much higher rates than Gen X and Baby Boomer women….Financial experiences and confidence vary by age….” Eager to attract and retain a diversity of talent, employers have also been addressing the importance of family-centric benefits:

 

It’s one thing to say that your company offers work-life balance, but it’s another thing to actually show it. One way to do that is by sharing details of your family-centric (or family-friendly) benefit offerings. These show that you value your employees’ time away from work holistically, not just when they show up to the office. Fertility benefits, adoption benefits, family and parental leave, caregiver support, and specialized support for special-needs children are just a few of the family-centric offerings that can lead to a variety of benefits to employers….

Employer-Assisted Housing (EAH) is  another benefit gaining traction, enabling the goal of home ownership, as workers contribute a pre-tax portion of their income to a homeowner savings plan.” As plan sponsors wisely continue improving benefit plans and services to better address the needs of more employees, it’s also important to upgrade protection for themselves, given their decision-making responsibilities. Under the high standards of ERISA, mistakes or oversights can quickly lead to investigations and allegations.

Colonial Surety Company is here to help, with affordable Fiduciary Liability Insurance A one-year policy, inclusive of 50k Cyber Liability Insurance, costs less than an hour of ERISA defense attorney fees in the event of a mishap. Colonial Surety’s affordable Fiduciary & Cyber Liability Insurance packages are specifically designed to help plan sponsors with:

 

 

  • DOL Compliance: The Department of Labor stresses the importance of Cyber Liability Insurance, considering its absence as a fiduciary breach. Our coverage not only safeguards the plan but also protects your business.

 

 

 

  • Comprehensive Protection: All our packages include Fiduciary Liability Insurance, ensuring your business and personal assets are shielded from the repercussions of fiduciary breaches. If you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be protected with defense costs and penalty limits up to $1,000,000.

 

 

 

  • Cost-Control: Our packages are available for 1, 2, and 3-year terms, providing flexibility and locked-in rates.

 

 

If you already have an ERISA bond package with Colonial, you can even lock in your rates by upgrading to the 2 or 3 year package.

Protect yourself, your business and your plan for the go forward:

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Providing customers with knowledgeable and friendly service since 1930, Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country.