Nearly two-thirds of women are delaying their retirement due to inflation
Nationwide Retirement Institute® survey of retirement plan participants reveals that compared to men, more women’s financial and retirement goals have been derailed and their confidence is shaken
Inflation has shaken women’s retirement security and confidence, according to a Nationwide Retirement Institute® survey of employer-sponsored retirement plan participants and sponsors. The study found that 62% of women are either expecting to retire later than originally planned or don’t believe they will ever be able to retire because of inflation, compared to 47% of men. This is a significant jump from 2021, when only one in four women expected to postpone or cancel their retirement due to the COVID-19 pandemic.
In addition to having to reduce savings contributions, women are also delaying their retirements to help their loved ones manage rising expenses. More than one in 10 (15%) women who are expecting to delay or cancel their retirement say they are doing so because they had or have to financially support a family member or friend as a result of inflation.
These setbacks are taking a toll on women’s futures and wellbeing. More than half (56%) of women feel worried when thinking about where they are at with their current retirement plan and financial investments, a 22-percentage point uptick from 2021. And 57% of those who are delaying or cancelling their retirement due to inflation say it has negatively impacted their mental health, versus 48% of men.
“Inflation has made saving for retirement particularly difficult for many Americans, but we are seeing the effects among employer-sponsored retirement plan participants greatest felt by women. In addition to having to reduce their retirement savings, women often have the responsibility of serving as the caretaker for loved ones,” said Amelia Dunlap, vice president, Retirement Solutions Marketing at Nationwide. “I know it can be difficult to navigate the short-term challenges we’re facing with market volatility and rates of inflation. It’s critical that plan sponsors help their employees keep focused on the longer-term view, avoid emotional investing or reactions and offer solutions that will help them stay on track for their goals.”
Women are seeking solutions
In addition to navigating inflation, women also struggle to optimize their income in retirement. For example, roughly half (51%) of female participants face challenges around turning their retirement savings into income in retirement. Only 4% of women are moderately or extremely familiar with retirement planning for decumulation.
However, more women than men are interested in solutions that can help them navigate challenges around inflation and better plan for retirement. Almost all (92%) female plan participants say they would be at least somewhat likely to rollover a portion or all of their current retirement plan savings into a guaranteed lifetime income investment option if they were able to, compared to 83% of men.
“The start of a new year is an opportune time for plan sponsors to reevaluate their retirement offerings to ensure their participants – particularly women – are able to retire on time with greater confidence,” continued Dunlap. “Guaranteed lifetime income investment options can help participants navigate today’s high inflation and provide them with the decumulation strategy they need in retirement. Additionally, there are investment solutions that help protect against market downturns for those that are seeking more certainty in this volatile market.”
Nationwide’s guaranteed lifetime income solutions (PDF) offer plan participants guaranteed income for life and can help provide protection against market volatility. Nationwide also offers educational resources for financial professionals, advisors and consultants. Plan sponsors – please contact your Nationwide representative.
Edelman Data and Intelligence (DxI) conducted an online survey on behalf of Nationwide from July 14 – August 5, 2022. Respondents included:
- 500 Company Plan Sponsors/Benefits Decision Makers. Business executives, business owners, human resources professionals, and financial management professionals who are full-time workers at U.S. businesses with at least 10 full-time employees. They must also be decision-makers for company retirement plans including 401(k), 403(b), or 457(b) plans)
- 100 Public Sector Plan Sponsors/Benefits Decision Makers. Full-time employees of a public sector entity (federal, state, local govt) that offers a defined contribution retirement plan to its employees. Must have some level of decision making regarding these plans. Can include HR, financial management professionals or government executives/senior managers with decision making authority.
- 1,000 Plan Participants (45+). 45+ years of age, full-time worker, who has access to 401(k), 403(b), 457(b) or a government defined contribution plan at their work. Sample included a minimum 100 government plan participants.
- 100 Plan Participants (35-44). 35-44 years of age, full-time worker, who has access to 401(k), 403(b), 457(b) or a government defined contribution plan at their work.
This material is not a recommendation to buy or sell a financial product or to adopt an investment strategy. Investors should discuss their specific situation with their financial professional.
This information is general in nature and is not intended to be tax, legal, accounting or other professional advice. The information provided is based on current laws, which are subject to change at any time, and has not been endorsed by any government agency.
Nationwide and Edelman Data and Intelligence are separate and non-affiliated companies.
Provisions of these options may vary based on plan selection and/or by state regulation. These investment options may not be available in all states.
Guarantees are backed by the claims-paying ability of the issuing insurance company.
Nationwide Investment Services Corporation (NISC), member FINRA, Columbus, OH. Nationwide Retirement Institute is a division of NISC.