Menu Our services in the selected location:
  • No services available for your region.
Select Location:
Remember my selection
Your browser is out of date.

WOMEN & RETIREMENT SECURITY

Navigating the Financial Vortex

December 7, 2022  |  10 Minute Read


 

Introduction

Women and Retirement Planning

 

This year’s Retirement Survey & Insights Report, Navigating the Financial Vortex: From Retirement Readiness to Retirement Income, highlighted the challenges that working and retired individuals face as they save and invest for their retirement, especially in today's environment. The report shared detailed insights on prominent retirement trends experienced by generation and outlined potential difficulties these age groups may face on their retirement journey.

 

In this supplemental report titled Women & Retirement Security, we take a deeper look at the gender differences from both working and retired Americans to better understand the challenges women face on their retirement journey.

 

There are many headwinds that are unique to women saving and preparing for retirement. While women they control one third of total US household financial assets ($10.9 trillion)1 and comprise 47% of the workforce,2 they earn 21% lower lifetime income than men.3 Part of this disparity is due to women on average having nine years’ less earned income, which affects their Social Security benefit.4 The impact of these factors are reflected in women's retirement contributions, which on average are 30% less than men.5 Women must also navigate the added complexity of longer life expectancy and need to plan for their savings to last longer, putting more pressure on retirement finances.

 

The obstacles women face are opportunities for plan sponsors to offer solutions that meet them where they are on their retirement savings journey. Personalized education and advisory services from a solutions provider can help support the unique factors affecting women. Additionally, data-driven engagement, segmented by participant sub-populations such as gender, can further address specific hurdles. This type of engagement strategy not only increases awareness amongst investors but can also provide them with actionable steps to get and stay on track for retirement.


 

Building the Retirement Survey

Methodology and Respondents

 

We evaluate survey responses from both working and retired Americans to understand the realities of preparing for and living in retirement. Our goal is to learn about the financial obstacles individuals need to overcome and the lessons they can apply. Women & Retirement Security includes key findings that we hope will help plan advisors and plan sponsors offer programs that better prepare women for a secure retirement.

 

Our findings are from 1,566 individuals surveyed in July and August 2022 and provide insights from a diverse set of perspectives, including (i) working individuals (967 working individuals across generations—working Baby Boomers, Generation X, Millennials, and Generation Z), (ii) retired individuals (599 retired individuals age 50-75) and (iii) gender and generational breakdowns for both populations.

 

 


Key Survey Findings

Women and Retirement

 

 

RETIRED WOMEN REPORT RECEIVING LESS THAN 70% OF THEIR PRE-RETIREMENT INCOME IN RETIREMENT

 

Eight in ten retired women report their total annual income is less than 70% of their pre-retirement income.

Having access to a plan that provides personalized guidance on savings and investment strategy that can adjust and recalibrate through life events can help individuals better reach retirement with sufficient savings to maintain their standard of living.

 

 

THE FINANCIAL VORTEX HAS GREATER IMPACT ON WOMEN’S ABILITY TO SAVE FOR RETIREMENT

 

The women’s retirement savings are impacted more than men across all competing financial factors evaluated.

The financial vortex is a combination of competing financial priorities, life events and planning assumptions. Though women juggle the same types of financial responsibilities as men, more women report that these factors impact their ability to save for retirement.

 

 

WOMEN ARE MORE LIKELY TO RETIRE EARLIER THAN PLANNED

 

More than 60% of women stated that they retired earlier than planned and 66% retired for reasons outside their control.

Not reaching one’s desired retirement age reduces the amount of time available to save for retirement and can place added pressure on those savings to last longer than expected. The majority of women respondents faced this risk and are more likely than men respondents to retire early because of external factors like health and taking care of a family member.

 

 

WOMEN ARE MORE LIKELY TO MANAGE THEIR OWN SAVINGS

 

Despite concerns about their ability to manage retirement savings, 69% of women use a self-directed approach.

Women report they are anxious and concerned about their ability to save for retirement, yet almost 70% of women respondents manage their own savings. This does not reflect their desire for help and advice, which is higher than reported by men.

 

 

 

 

At a Glance

By the Numbers

 

 

Women face unique challenges that can complicate their retirement planning journey. A look at the data shows that they are more likely to have taken time away from the workforce, more likely to have retired earlier than planned due to unexpected reasons, and often choose to manage their finances themselves.


 

Digesting the Data

Women and Retirement Security

 

Take a closer look at the myriad ways that women differ from men in terms of their retirement journeys.


Conclusion

Helping Women Navigate the Financial Vortex

 

Women Face a Unique Set of Circumstances That Can Exacerbate the Effects of the Financial Vortex

Lower lifetime earnings, greater caregiving needs and time out of the workforce, all result in a broader impact of competing financial responsibilities leading to lower retirement savings and Social Security benefits. In addition, since women on average have longer lifetime expectancy, there is more concern about having sufficient savings given a longer retirement than men.

 

 

Less Confidence in their Ability to Manage their Savings 

Women report more concern and higher levels of stress managing their retirement savings. Additionally, they report lower levels of confidence in their ability to manage them effectively. Plan sponsors have an opportunity to increase financial literacy and resilience, to build confidence in employees’ ability to make decisions about their retirement finances.

 

 

Focused on the Fundamental Needs to Meet Retirement Goals 

Having sufficient savings, knowing when to adjust saving strategy to stay on track, and knowing how long savings will last are top concerns for women. While these are common challenges, they are also very personal. The challenge to plan sponsors is to consider well-designed personalized savings and investing offerings that ensure adjustments are aligned with individual goals.

 

 

More Women Manage Savings on their Own, Yet Have a Strong Desire for Guidance and Advice 

Despite greater concern over their ability, women are more likely to manage their savings on their own and less likely to leverage educational and advice resources. The appetite for education and advice, however, is stronger for women than men. The difference in utilization of these resources highlights the importance of financial education and specific programs that can address unique needs and challenges.

 

 

Important Role of the Employer 

As we saw in our Retirement Survey & Insights Report 2022, the importance of financial education and advice is clear, and financial advisors are often regarded as the most important source for it. For women, however, family members and employer-sponsored retirement plans are reported as top sources of financial help. The value of trust and connection cannot be understated in retirement planning. Plan sponsors can provide retirement planning resources around caregiving, leaving the workforce, income generation in retirement and more by offering services that support retirement savers based on their unique situation.


 

 

 

 

Related Insights

  • October 12, 2022 | GSAM Featured Insights

    Navigating the Financial Vortex: From Retirement Readiness to Retirement Income

    October 12, 2022 Investors face a complex backdrop due to rising interest rates, high inflation and market volatility, creating a challenging environment to generate sustainable income, and causing a strain on one’s finances. This year’s Retirement Survey & Insights Report, Navigating the Financial Vortex: From Retirement Readiness to Retirement Income, outlines these hardships and considers possible paths forward. Read More
  • Workplace Retirement Solutions

    December 5, 2022 Every Business is Unique. Every Retirement Journey is Personal. Goldman Sachs Workplace Retirement Solution is an integrated defined contribution plan solution designed to support your business and your employees. Read More

Start the Conversation

Committed to providing you with the insights you need to build your practice.

 

1 Source: Goldman Sachs’s EmpowerTM the Female Investor Advisor Seminar. Strategic Advisory Solutions. As of: October 19, 2021.
2 Source: U.S. Bureau of Labor Statistics, Report 1097. As of March 2022.
3 Source: Senate Joint Economic Committee, “Gender Pay Inequality, Consequences for Women, Families, and the Economy.” 2016.
4 Source: Administration for Community Living, “2018 Profile of Older Americans.” May 31, 2019.
5 Source: GAO, “The Gender Pay Gap and Its Effect on Women’s Retirement Savings.” March 24, 2021.

Disclosures

All investing involves risk, including loss of principal.

Views expressed discussed are those of survey respondents, compiled by Goldman Sachs Asset Management as of August 31, 2022.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

THESE MATERIALS ARE PROVIDED SOLELY ON THE BASIS THAT THEY WILL NOT CONSTITUTE INVESTMENT ADVICE AND WILL NOT FORM A PRIMARY BASIS FOR ANY PERSON’S OR PLAN’S INVESTMENT DECISIONS, AND GOLDMAN SACHS IS NOT A FIDUCIARY WITH RESPECT TO ANY PERSON OR PLAN BY REASON OF PROVIDING THE MATERIAL OR CONTENT HEREIN. PLAN FIDUCIARIES SHOULD CONSIDER THEIR OWN CIRCUMSTANCES IN ASSESSING ANY POTENTIAL INVESTMENT COURSE OF ACTION.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by Goldman Sachs Asset Management to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

Asia excluding Japan: Please note that neither Goldman Sachs Asset Management (Hong Kong) Limited (“GSAMHK”) or Goldman Sachs Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H ) (“GSAMS”) nor any other entities involved in the Goldman Sachs Asset Management business that provide this material and information maintain any licenses, authorizations or registrations in Asia (other than Japan), except that it conducts businesses (subject to applicable local regulations) in and from the following jurisdictions: Hong Kong, Singapore, Malaysia, India and China. This material has been issued for use in or from Hong Kong by Goldman Sachs Asset Management (Hong Kong) Limited, in or from Singapore by Goldman Sachs Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H) and in or from Malaysia by Goldman Sachs (Malaysia) Sdn Berhad (880767W).

Australia and New Zealand: This material is distributed in Australia and New Zealand by Goldman Sachs Asset Management Australia Pty Ltd ABN 41 006 099 681, AFSL 228948 (’GSAMA’) and is intended for viewing only by wholesale clients in Australia for the purposes of section 761G of the Corporations Act 2001 (Cth) and to clients who either fall within any or all of the categories of investors set out in section 3(2) or sub-section 5(2CC) of the Securities Act 1978, fall within the definition of a wholesale client for the purposes of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA) and the Financial Advisers Act 2008 (FAA),and fall within the definition of a wholesale investor under one of clause 37, clause 38, clause 39 or clause 40 of Schedule 1 of the Financial Markets Conduct Act 2013 (FMCA) of New Zealand (collectively, a “NZ Wholesale Investor”).

GSAMA is not a registered financial service provider under the FSPA. GSAMA does not have a place of business in New Zealand. In New Zealand, this document, and any access to it, is intended only for a person who has first satisfied GSAMA that the person is a NZ Wholesale Investor. This document is intended for viewing only by the intended recipient. This document may not be reproduced or distributed to any person in whole or in part without the prior written consent of GSAMA.

To the extent that this document contains any statement which may be considered to be financial product advice in Australia under the Corporations Act 2001 (Cth), that advice is intended to be given to the intended recipient of this document only, being a wholesale client for the purposes of the Corporations Act 2001 (Cth).

Any advice provided in this document is provided by either of the following entities. They are exempt from the requirement to hold an Australian financial services licence under the Corporations Act of Australia and therefore do not hold any Australian Financial Services Licences, and are regulated under their respective laws applicable to their jurisdictions, which differ from Australian laws. Any financial services given to any person by these entities by distributing this document in Australia are provided to such persons pursuant to the respective ASIC Class Orders and ASIC Instrument mentioned below.

Goldman Sachs Asset Management, LP (GSAMLP), Goldman Sachs & Co. LLC (GSCo), pursuant ASIC Class Order 03/1100; regulated by the US Securities and Exchange Commission under US laws.

Goldman Sachs Asset Management International (GSAMI), Goldman Sachs International (GSI), pursuant to ASIC Class Order 03/1099; regulated by the Financial Conduct Authority; GSI is also authorized by the Prudential Regulation Authority, and both entities are under UK laws.

Goldman Sachs Asset Management (Singapore) Pte. Ltd. (GSAMS), pursuant to ASIC Class Order 03/1102; regulated by the Monetary Authority of Singapore under Singaporean laws

Goldman Sachs Asset Management (Hong Kong) Limited (GSAMHK), pursuant to ASIC Class Order 03/1103 and Goldman Sachs (Asia) LLC (GSALLC), pursuant to ASIC Instrument 04/0250; regulated by the Securities and Futures Commission of Hong Kong under Hong Kong laws

No offer to acquire any interest in a fund or a financial product is being made to you in this document. If the interests or financial products do become available in the future, the offer may be arranged by GSAMA in accordance with section 911A(2)(b) of the Corporations Act. GSAMA holds Australian Financial Services Licence No. 228948. Any offer will only be made in circumstances where disclosure is not required under Part 6D.2 of the Corporations Act or a product disclosure statement is not required to be given under Part 7.9 of the Corporations Act (as relevant).

Bahrain: This material has not been reviewed by the Central Bank of Bahrain (CBB) and the CBB takes no responsibility for the accuracy of the statements or the information contained herein, or for the performance of the securities or related investment, nor shall the CBB have any liability to any person for damage or loss resulting from reliance on any statement or information contained herein. This material will not be issued, passed to, or made available to the public generally.

Canada: This presentation has been communicated in Canada by GSAM LP, which is registered as a portfolio manager under securities legislation in all provinces of Canada and as a commodity trading manager under the commodity futures legislation of Ontario and as a derivatives adviser under the derivatives legislation of Quebec. GSAM LP is not registered to provide investment advisory or portfolio management services in respect of exchange-traded futures or options contracts in Manitoba and is not offering to provide such investment advisory or portfolio management services in Manitoba by delivery of this material.

Cambodia: The attached information has been provided at your request for informational purposes only and is not intended as a solicitation in respect of the purchase or sale of instruments or securities (including funds) or the provision of services. Neither Goldman Sachs Asset Management (Singapore) Pte. Ltd. nor any of its affiliates is licensed as a dealer or investment advisor under The Securities and Exchange Commission of Cambodia. The information has been provided to you solely for your own purposes and must not be copied or redistributed to any person without the prior consent of Goldman Sachs Asset Management.

East-Timor: The attached information has been provided at your request for informational purposes only and is not intended as a solicitation in respect of the purchase or sale of instruments or securities (including funds), or the provision of services. Neither Goldman Sachs Asset Management (Singapore) Pte. Ltd. nor any of its affiliates is licensed under any laws or regulations of Timor-Leste. The information has been provided to you solely for your own purposes and must not be copied or redistributed to any person or institution without the prior consent of Goldman Sachs Asset Management.

European Economic Area (EEA): This material is a financial promotion disseminated by Goldman Sachs Bank Europe SE, including through its authorised branches ("GSBE"). GSBE is a credit institution incorporated in Germany and, within the Single Supervisory Mechanism established between those Member States of the European Union whose official currency is the Euro, subject to direct prudential supervision by the European Central Bank and in other respects supervised by German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufischt, BaFin) and Deutsche Bundesbank.

Israel: This document has not been, and will not be, registered with or reviewed or approved by the Israel Securities Authority (ISA”). It is not for general circulation in Israel and may not be reproduced or used for any other purpose. Goldman Sachs Asset Management International is not licensed to provide investment advisory or management services in Israel.

Japan: This material has been issued or approved in Japan for the use of professional investors defined in Article 2 paragraph (31) of the Financial Instruments and Exchange Law by Goldman Sachs Asset Management Co., Ltd.

Jordan: The document has not been presented to, or approved by, the Jordanian Securities Commission or the Board for Regulating Transactions in Foreign Exchanges.

Kuwait: This material has not been approved for distribution in the State of Kuwait by the Ministry of Commerce and Industry or the Central Bank of Kuwait or any other relevant Kuwaiti government agency. The distribution of this material is, therefore, restricted in accordance with law no. 31 of 1990 and law no. 7 of 2010, as amended. No private or public offering of securities is being made in the State of Kuwait, and no agreement relating to the sale of any securities will be concluded in the State of Kuwait. No marketing, solicitation or inducement activities are being used to offer or market securities in the State of Kuwait.

Oman: The Capital Market Authority of the Sultanate of Oman (the "CMA") is not liable for the correctness or adequacy of information provided in this document or for identifying whether or not the services contemplated within this document are appropriate investment for a potential investor. The CMA shall also not be liable for any damage or loss resulting from reliance placed on the document.

Qatar: This document has not been, and will not be, registered with or reviewed or approved by the Qatar Financial Markets Authority, the Qatar Financial Centre Regulatory Authority or Qatar Central Bank and may not be publicly distributed. It is not for general circulation in the State of Qatar and may not be reproduced or used for any other purpose.

Saudi Arabia: The Capital Market Authority does not make any representation as to the accuracy or completeness of this document, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document. If you do not understand the contents of this document you should consult an authorised financial adviser.

South Africa: Goldman Sachs Asset Management International is authorised by the Financial Services Board of South Africa as a financial services provider.

Switzerland: For Qualified Investor use only – Not for distribution to general public. This is marketing material. This document is provided to you by Goldman Sachs Bank AG, Zürich. Any future contractual relationships will be entered into with affiliates of Goldman Sachs Bank AG, which are domiciled outside of Switzerland. We would like to remind you that foreign (Non-Swiss) legal and regulatory systems may not provide the same level of protection in relation to client confidentiality and data protection as offered to you by Swiss law.

UAE: This document has not been approved by or filed with the Central Bank of the United Arab Emirates or the Securities and Commodities Authority. If you do not understand the contents of this document, you should consult with a financial advisor.

United Kingdom: In the United Kingdom, this material is a financial promotion and has been approved by Goldman Sachs Asset Management International, which is authorized and regulated in the United Kingdom by the Financial Conduct Authority.

Vietnam: The attached information has been provided at your request for informational purposes only. The attached materials are not, and any authors who contribute to these materials are not, providing advice to any person. The attached materials are not and should not be construed as an offering of any securities or any services to any person. Neither Goldman Sachs Asset 

Management (Singapore) Pte. Ltd. nor any of its affiliates is licensed as a dealer under the laws of Vietnam. The information has been provided to you solely for your own purposes and must not be copied or redistributed to any person without the prior consent of Goldman Sachs Asset Management.

Confidentiality 

No part of this material may, without Goldman Sachs Asset Management’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient.

Date of First Use: December 7, 2022. 299045-OTU-1705355