The Perfect Storm

The following is a summary of the research on  Factors Contributing to Lower  Retirement Confidence Among Women Who Are Not Married written by Craig Copeland, Ph.D. of the Employee Benefit Research Institute (pdf file)

The Retirement Confidence Survey (RCS) was conducted for its 32nd year in 2022 to measure attitudes toward, preparations for, and understanding of the various issues surrounding retirement by American workers and retirees. In 2022, the RCS found that Americans have near-record-high confidence in having enough money to live comfortably throughout retirement. However, unmarried women workers and retirees have lower retirement confidence than their married counterparts and are more likely to have lower incomes and assets. Unmarried retirees are also more likely to say that their expenses were higher than they expected and are more likely to have retired earlier than planned.

In this Issue Brief, the attitudes, considerations, and behaviours surrounding the retirement of women workers and retirees of different marital statuses are examined to provide greater insight into what can help improve women's retirement outcomes. Key findings are:

• Divorced and single, never-married women workers are more likely to have lower levels of financial assets than married women workers. Just 27 percent of married women workers have assets of less than $25,000 compared with just over half for divorced women workers (58 percent) and single, never-married women workers (56 percent). Married women retirees are also less likely to have lower levels of assets than divorced and widowed retirees.

• Married women workers are more likely to say that they are confident they will have enough money to live comfortably throughout their retirement years than both divorced and single, never-married women workers. Among retirees, married women are also more likely to be confident that they will have enough money in retirement than divorced or widowed women.

• Married women workers are more likely to agree that they feel knowledgeable about managing their day-to-day finances than single, never-married women workers. The share of divorced women workers who feel knowledgeable about managing finances is not significantly different from the share of married or single, never-married women workers.

• Both divorced and single, never-married women workers are more likely to agree that retirement savings are not a priority relative to the current needs of their family than married women workers. When asked about priorities aside from managing day-to-day finances, single, never-married women workers are more likely to choose purchasing a home or starting a business as the top-three longer-term financial planning priorities. Married and divorced women workers are most likely to say that saving and investing for retirement is among their top three longer-term financial planning priorities.

• When asked if individuals even know where to go to find good financial or retirement planning advice, one-third of women either strongly or somewhat agree with the statement that they do not know where to go for good financial or retirement planning advice. This is substantially higher for single, never married women, as 45 percent report that they do not know where to go for financial advice.

• Married women workers are the most likely to feel they have enough money to cover an emergency expense, while divorced women workers are the least likely to feel they can cover an emergency expense. Furthermore, married women workers are more likely to say they have done a retirement needs calculation than divorced or single, never-married women workers—49 percent compared with 35 percent each says they have done so.

• Women of each marital status who are offered a workplace retirement plan cite better explanations for how much income their savings will produce in retirement in their top four most valuable improvements to their workplace plan. However, divorced women are most likely to say that none of the possible improvements are the most valuable, whereas married and single, never-married women have three of the same four in their top improvements.

• Both divorced and widowed women retirees were more likely to have retired earlier than planned than married women retirees — 51 percent vs.42 percent. Women retirees of each marital status have equal likelihoods of retiring later than planned at just less than 1 in 10.

• When asked how their overall lifestyle in retirement now compares to how they expected it to be before they retired, a majority of women retirees say their lifestyle is about the same as they expected. However, married women retirees are more likely to say their lifestyle is better than expected, while divorced and widowed women retirees are more likely to say their lifestyle is worse than expected.