The largest cohort of baby boomers is set to reach age 65 by 2030, with women making up 52% of these peak boomers. A recent economic impact study by the Alliance for Lifetime Income revealed that women are more likely to face financial challenges in retirement compared to men. The research found that the majority of baby boomers are not financially prepared for retirement, as income from employer pensions has diminished and individuals are more dependent on personal savings and Social Security. People who are Black, Hispanic, or without college degrees are also at higher risk for financial insecurity in retirement.
The study highlighted that men, white individuals, and those with college degrees are better positioned to handle retirement financially, as they are more likely to have multiple retirement accounts with larger balances. The median retirement savings for peak boomers is $225,000, with women having significantly lower savings compared to men. This disparity in savings for women extends to various types of retirement assets, including defined contribution plans, individual retirement accounts, investments, savings accounts, and home equity.
The research also revealed a disparity in Social Security benefits and annuity payouts between retired peak boomer women and their male counterparts. By 2030, 69% of women and 31% of men are expected to qualify for Supplemental Security Income, highlighting the financial vulnerability of women in retirement. To address these disparities, Caroline Feeney of Prudential Financial emphasized the need to tackle root causes such as the gender pay gap, longer life expectancy for women, lower risk tolerance, and caregiving responsibilities.
Feeney stressed the importance of empowering women to seek expert guidance and simplify financial products and solutions to make them more appealing. Employers also play a crucial role in addressing these root causes and supporting women in retirement planning. By closing the gender pay gap, increasing financial literacy, and providing access to retirement planning resources, women can become better prepared for retirement and achieve financial security. Overall, the study highlights the urgent need to address the financial challenges faced by women and other vulnerable groups as they approach retirement age.
