Women Express Concern about Retirement Crisis, Long-Term Care Costs

When asked if the U.S. faces a retirement crisis, 80% of women agreed that it is indeed a disaster in the making, and even more women agreed that employers should be contributing more money to workers’ retirement plans, according to data from Greenwald Research and the National Institute on Retirement Security. 

As women still, on average, earn less than men, often take time away from the workforce for caregiving and tend to live longer than men, they have a higher hill to climb when it comes to saving for retirement. 

“If policymakers are serious about improving the financial resilience of women, they’ll need to implement pragmatic retirement solutions that will help women shore up their retirement position,” said Dan Doonan, executive director of NIRS, in a statement. “Women clearly see increasing pension coverage as part of the retirement equation, and they want to see action now on Social Security.” 

NIRS found than 76% of women believe that retirement overall is “only getting harder,” with many citing issues like rising inflation, rising health care costs, debt and fewer pensions.  

In fact, 82% of women surveyed agreed with the statement that “all workers should have access to a pension plan so they can be independent and self-reliant in retirement,” and 75% agreed with the statement that “the disappearance of traditional pensions has made it harder for workers to achieve the American Dream.” 

To what extent do you agree or disagree: The disappearance of traditional pensions has made it harder for workers to achieve the American Dream. 

The findings about women’s views on retirement are based up on a national survey of working age Americans conducted by Greenwald Research, which was presented as a supplement to the NIRS report. 

With defined contribution plans, if someone is earning less, they will ultimately contribute less to their retirement account. For example, according to research from the Government Accountability Office in 2020, women reported annual contributions to retirement accounts that were around 30% lower than men’s contributions. 

NIRS argued in its report that increased support for traditional pensions is likely because defined benefit plans “take the complexity out of retirement.” The plan sponsor is in charge of handling plan investments with professional asset managers, and employees can rely on a stable source of income that lasts through the entirety of retirement. 

Since IBM announced last year that it was reopening its cash balance pension plan and ending its 401(k) matching contributions, there has been speculation that other companies would follow suit.  

On the public sector side, NIRS noted that a town council in Trumbull, Connecticut recently voted unanimously to resume offering pensions to its police officers to address workforce shortages that it said developed after switching to a defined contribution plan for those employees 10 years ago. Legislators in Alaska are also pursuing a return to providing pensions to public employees as the state faces a troubling shortage of employees who deliver important public services. 

Overall, NIRS found that more than 80% of Americans with pension plans are confident their pensions will be there at retirement. With 401(k) plans, however, workers expressed concern about their plan balances fluctuating with stock market ups and downs.  

Long-Term Care Costs 

NIRS also found that women, in particular, are concerned about long-term care costs in retirement. According to the report, 81% of women are worried about costs of long-term care, and only 38% feel confident they will be able to pay for any needed long-term care costs. 

Because there is a lack of alternatives and feasible ways to finance the rising cost of long-term care, many middle-class seniors are forced to spend down their assets to make themselves eligible for Medicaid or some type of long-term services and supports, which can increase demand for, and the cost of, the publicly funded insurance program. 

Most women (86%) agreed that the federal government should do more to help Americans get access to quality long-term care when the need arises.  

However, NIRS found that Americans are split on whether the government should collect money from each American’s paycheck to pay for long-term care, similar to how it does for Social Security and Medicare. One example of a government long-term care program is Washington State’s WA Cares. The state recently enacted a new 0.58% payroll tax to pay for the state-run long-term care insurance program where eligible participants would receive up to $36,500 per person, per lifetime to help pay for nursing care and other services they may need as they age.  

The vast majority of Americans (87%) said leaders in Washington, D.C. do not understand how hard it is for workers to save for retirement, up from 76% in 2020, and a majority (87%) want policymakers to focus more on retirement-related issues and give them “higher priority on the policy agenda,” according to the NIRS report.  

The NIRS study was conducted between October 10 and October 25, 2023, and included responses from 1,208 individuals ages 25 and older.