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Women in Public Service Express Heightened Concerns About Retirement Savings
A new MissionSquare report found that women working in state and local government roles were less likely than their male counterparts to report having personal savings, pensions or defined contribution plans.
When compared with their male colleagues, women in public service jobs expressed more concern about their finances and outliving their retirement savings, according to a new national survey conducted by MissionSquare.
After surveying 1,009 state and local government workers regarding retirement issues, MissionSquare found that women were significantly less likely to report having personal savings, pensions or defined contribution plans than men in the same public service roles.
For instance, 69% of women reported that personal savings, individual retirement accounts or investment accounts will be a source of income in retirement, compared with 82% of men. In addition, 42% of women said they will rely on a defined contribution or deferred compensation plan in retirement, compared with 54% of men.
Women in public service jobs were also less likely to report that the retirement benefits provided by their employer were sufficient to meet their retirement needs. The MissionSquare report pointed out that since defined benefit pensions and deferred compensation plans are among the most common retirement benefits provided by public employers, and since women were less likely to report having such plans, their dissatisfaction is not surprising.
Fewer female than male respondents said their retirement benefits made them more inclined to stay with their current job. For example, 54% of women said their employer’s retirement benefits made them more inclined to stay, compared with 68% of men.
However, a positive finding from the report was that women showed a clear interest in receiving more information and financial education. As a result, MissionSquare recommended that public service employers consider ramping up their retirement and benefits-related communication beyond the open enrollment period.
According to MissionSquare, 86% of public sector workers have access to DB pensions, while 39% have access to deferred compensation plans. But, according to a previous survey of employees younger than 35, 20% of respondents said they did not know what type of plan they had.
Women in the recent survey reported the areas of financial planning in which they feel they could benefit from more education, including: how their employer’s retirement plan is taxed; how to identify the benefits most relevant or important to them at the current stage of their career; and the vesting schedule of their retirement plan, among others.
This hope for additional information was also reflected in the plans that surveyed employees reported having for drawing down their assets in retirement. Among women, the most common response was, “I don’t know,” whereas among men, the most common response was, “I will do my own calculation.” MissionSquare found that men’s responses may either reflect a robust understanding of drawing down assets in retirement or a lack of consideration of available alternatives.
About 20% of women and 23% of men said they plan to hire or consult with an adviser or financial planner to decide how they are going to draw down their assets. But overall, nearly one-quarter of women (24%) said they are unsure how they will use their retirement savings—almost double the rate of men (13%).
Separately, a recent report from Corebridge Financial found that women tend to struggle more with retirement savings, as they are faced with large pay gaps and often experience career interruptions due to caregiving responsibilities. For example, Corebridge found that 56% of retired women took at least one month out of work to care for someone or provided care for someone while still working. These are all factors that can impede women’s ability to prepare for retirement.
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