How to Better Support Women in Retirement Planning

Lee McAdoo

The Charles Schwab Corp. recently conducted a survey among women investors who self-identify as either the primary or joint financial decisionmakers in their households. We learned that 80% of them prioritize long-term financial goals, with retiring on time or earlier as their No. 1 investment priority.

When we asked these women about their greatest investing strengths, patience and discipline came in at the top of their lists. This tendency toward steady, goal-oriented investing behavior aligns well with retirement planning.

We also uncovered something else in the research: The way women think about and engage with investing is shifting, and a lot of that has to do with changes across generations.

Understanding these trends is essential for plan sponsors and their consultants seeking to support women and help them pursue their long-term financial goals.

Investing Earlier and Differently

Millennial women are beginning their investment journeys nearly a decade sooner than Baby Boomers, at an average age of 27, compared with 36. Twice as many Millennials reported starting between the ages of 18 and 24. While retirement remains a key objective, it is no longer the only—or even the primary—reason younger women begin investing.

Many Millennial women are investing to grow their money, become financially independent or reach other financial goals, such as homeownership or education. They are also more likely than older generations to invest simply to learn how investing works. This shift underscores a broader trend—women are becoming more financially engaged, curious and proactive at earlier stages in life.

Retirement Planning Continues to Evolve

That trend is clearly being reflected within employer-sponsored retirement plans. Today, 84% of women report having some form of retirement account, and the participation rate is steadily increasing from generation to generation. More than 70% of Millennial women now contribute to a 401(k) or similar plan, a higher percentage than Gen X or Boomer women.

But many of those Millennial women already have some investing experience by the time they become eligible to participate in a 401(k). That’s a distinct difference from what we know about women from older generations. For many of them, eligibility to participate in a retirement plan was their primary trigger to begin investing.

Implications for Plan Sponsors and Consultants

These generational changes present clear opportunities for workplace benefit offerings. Not every woman joining a retirement plan is a beginner. Many come with investment experience and a strong sense of financial independence. Yet others still need foundational education and support.

Women in the survey expressed a strong interest in two areas: investing strategies and retirement planning advice. Gen X women, in particular, many of whom are nearing retirement age, ranked retirement planning as their top priority. Tailored support for them is critical.

It’s also worth noting that over the next 20 years, the greatest intergenerational transfer of wealth in history will occur, as Baby Boomers and older generations pass their assets on to their heirs—many of them from Gen X and younger generations. This will reshape the financial landscape for many women, and they will be looking for tools, resources and support to help navigate their inheritance.

Action Steps to Support Women Investors

To meet the evolving needs of women, consider the following strategies:

• Offer personalized education: Provide tools and guidance tailored to different levels of investment experience. Not every participant will need the basics. Many will appreciate advanced insights;
• Reinforce long-term behaviors: Offer workshops and tools that reinforce the value of patience and discipline, and reach out when markets are volatile to help participants stay the course, stressing the value of advice and managed accounts when available;
• Address barriers to saving: Financial challenges such as student loan debt can hinder retirement contributions. Offering resources for employees as they navigate these issues can help improve long-term outcomes;
• Encourage savings growth: Implement and promote features like automatic savings increases to make it easier for participants to boost their contributions over time;
• Support self-directed investors: Younger women may be more likely to prefer managing their own investments. If the plan includes self-directed brokerage accounts, ensure participants know how to use them effectively;
• Don’t assume everyone knows the full range of benefits available: Even women with investing experience may not be taking full advantage of retirement-specific benefits such as employer matches, Roth 401(k) options, or health savings accounts. Offer guidance to maximize all available resources;
• Integrate estate planning resources into financial wellness programs: Proactively prepare participants for the “Great Wealth Transfer” by offering estate planning education, tools and services. This can come in a range of forms, from workshops and webinars to digital platforms to personalized one-on-one sessions with financial professionals; and
• Provide holistic support: Consider extending beyond retirement plans to address participants’ full financial picture, including tools for health care savings, debt management, college planning and more. These resources can not only help improve financial outcomes, but can also enhance recruitment and retention, especially among younger employees.

Women are a highly engaged and fast-evolving group of investors. As their financial behavior changes, it is important to meet them where they are. By adapting strategies and offering meaningful support, we can help women plan for retirement with confidence.

Lee McAdoo is the managing director of Schwab Retirement Plan Services.

This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of ISS STOXX or its affiliates.