Retirement, that promised golden pot at the end of the working life rainbow, turns out not to be very appealing for most American women. Perhaps it is because they fear they will outlive their savings. Even those who do plan to retire soon say their retirement plans actually include some kind of paid work or a plan to work past 65.
According to a recent study by the Transamerica Center for Retirement Studies, even though women today are better educated and have had greater career opportunities than those in generations past, there are still obstacles that have made pensions and savings for retirement less attractive for women workers.
Not surprising, women have had lower pay then men, have taken time out for childbirth and parenting, and have often worked in part time jobs that do not offer pensions or access to retirement savings plans. They have also been the caregivers to ill relatives and have often had to take time off from work or may have to in the future. Most say this will have a negative effect on their retirement plans.
Here are some findings from the Transamerica study:
* The majority of women don’t think they will retire “comfortably.”
* Too many women either don’t have a financial advisor or wait until they are near retirement before seeking advice.
* Retirement advice is too complicated so “I’ll think about it tomorrow.”
* Women tend to underestimate how much money they will need in retirement.
* The majority of women don’t have retirement savings opportunities where they work and depend on 401ks or savings for retirement.
* Most women have no backup plan should they have to retire before they planned.
Luckily, a US senator (a woman, of course), has introduced legislation that is aimed at improving women’s retirement options. The Women’s Pension Protection Act of 2015 by Sen. Patty Murray of Washington strengthens consumer protections to improve access to retirement savings plans for long-term, part time workers, most of whom are women. Coverage for low wage and part time workers not currently eligible would be extended by amending the current minimum participation standards for part time workers.
The measure would also extend spousal protections now available for defined benefit plans to plans like a 401k, and prevent one spouse taking a loan or distribution from the plan without the other spouse’s knowledge or consent.
The legislation also aims to increase financial literacy by requiring financial providers to link their products to the Consumer Financial Protection Bureau, and provides grant to community based organizations to improve the financial literacy of women.
Senator Murray’s bill is co-sponsored by 8 other female senators.