By Gabrielle Olya
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The Financial Services Industry Doesn’t Cater Enough To Women
One factor in women’s lack of retirement planning is the fact that financial services companies don’t do enough to educate and cater to this audience.
“Women are generally savers, and the financial services community needs to provide additional guidance and support for women who save to make sure that they’re investing, make sure they understand what their options are,” Eweka said. “It needs to be a customized, tailored approach when it comes to women because one size doesn’t really fit all.”
“When we think about empowering women to be able to learn and implement investing their money appropriately for their retirement, we need to help them understand what their options are, whether it’s through their employer or setting [retirement savings accounts] up on their own,” Eweka said.
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Women Have Less Disposable Income Than Men
Beyond the financial literacy issue, there is also an actual financial one — women simply don’t have as much money as men to set aside for retirement.
“It makes sense that women have less retirement savings than men because traditionally, women have been paid less than men,” Eweka said. “It’s 82 cents on the dollar for all women — Black women earn 63 cents on a dollar and Latina women earn 53 cents. Those stats are staggering.”
In addition to being paid less, women are also more likely to lose income due to caregiving responsibilities.
“Since the [start of the] pandemic in 2020, nearly 2 million women left the workforce,” Eweka said. “A lot of that is because they had to take care of children or elderly relatives. A lot of their lost earnings and savings are never recovered when they have to go through these types of situations.”
Many women are struggling just to make ends meet. A separate survey conducted by TIAA found that 29% of women struggle to pay their monthly bills, versus 19% of men.
“You don’t have a retirement account if you’re struggling to pay your monthly bills,” Eweka said. “It’s a direct correlation. If you can’t keep up with monthly bills, saving for retirement is a luxury.”
How Women Can Get Started Planning for Retirement
Eweka recommends meeting with a financial planner or advisor as a first step of planning for retirement — and this may be more accessible than many women think.
“If you do have a retirement plan at work, you can go to the company that manages your retirement plan and more often than not, those companies provide complementary services,” Eweka said. “They’ve employed financial advisors and financial planners to assist you, the client, with setting you up, helping you understand what your goals are and taking you through the process so that you know what it is you’re working towards. [They’ll also] make sure you’re saving enough towards that goal and that [your funds are] invested correctly.”
If you don’t have access to a financial advisor through your employee retirement plan, Eweka recommends seeking out any of the free retirement planning tools that are available online.
Once you have your accounts set up, the easiest way to save for retirement is to automate your contributions.
“Set up automatic contributions to your retirement account, whether that’s a 401(k), 403(b) or IRA,” Eweka said. “Set those payments up first and then set up your lifestyle around what’s remaining and available after that.”
Even if you’re unable to contribute much right now, start small, Eweka said.
“Put aside what you can,” she said. “At a minimum, if you get a match, put that. If you can afford more than the match, target 10% to 15% of your income. If you can do more, if you can max out, do so. Because of compounding interest, investing just a little amount can really help you to have a good amount of income in retirement.”
