‘Living’ Proofs

In a calendar already chock full of special days and commemorative months, next week we’ll add another: Women’s Retirement Security Day.

If this one has snuck up on you — well, it’s a first. July 14 this year, the second Tuesday in July thereafter. A national day of action dedicated to raising awareness, sharing resources, and improving retirement outcomes for women.

And that’s the key — not a day of remembrance, a day for action.

For much of this country’s history, women were largely expected to derive retirement security through someone else’s employment — a husband’s pension, survivor benefits, or eventually Social Security spousal benefits. The retirement system itself was largely designed around a traditional, uninterrupted male career model: one worker, one employer, one pension, one primary breadwinner.

But many women’s lives — including my mother’s — never really fit that model.

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Mom, a schoolteacher, had a career of her own, but took a fairly significant (and unpaid) “sabbatical” so that she could stay at home with her four kids until the youngest was ready to head off to school. When she returned to work, she was covered by a state pension plan, albeit one that required from her paycheck a much more significant contribution than most defer into 401(k)s.

On top of that she saved diligently to buy back the service credits she had forgone during the years she worked in our home without a paycheck — and then set aside money in her 403(b) account (over Dad’s objections, I might add — he didn’t think they could afford it).

Indeed, generally speaking, women face many more challenges regarding retirement preparation than men. They live longer (and thus are likely to have longer retirements to fund), tend to have less saved for retirement (because of lower incomes and more workforce interruptions), and in addition to longer retirements, those longer lives mean they are also more likely to face what can be the catastrophic financial burden of long-term care expenses.

And their caregiving responsibilities often extend to aging parents, even after their own children have left the “nest.”

Women are also less likely to work for an employer that offers a retirement plan at work, and more likely to work part time — which historically has often meant being excluded from plan participation altogether. Only about 1 in 3 women use a professional financial advisor to help manage retirement savings and investments.[i]

Oh, and like my mother, they tend to outlive their spouses — often by far more than the variance in average life expectancy tables might suggest.

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Let’s face it, one of the enduring realities for many women is that the very responsibilities that strengthen families can weaken long-term financial security. Women remain more likely to interrupt careers, reduce hours, or work part time because of caregiving responsibilities — decisions that can ripple through retirement outcomes for decades.

The “magic” of compounding only works when there is something to compound.

Retirement preparedness isn’t merely about accumulating assets. It’s about preserving dignity, independence, and choice.

For everyone.

That’s what the inaugural Women’s Retirement Security Day should remind us.

Not simply that women face different retirement challenges — though they clearly do.

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But that a retirement system designed around real life needs to consider the people who actually live it.

Once again, though — this is not a day for flowers, cards, and social media posts. This is a day for action.

Let’s get to it.

• Nevin E. Adams, JD

More information is available at: https://www.usaretirement.org/get-involved/wir/womens-retirement-security-day/

[i] See 25 Facts About Women's Retirement Outlook | 25th Annual Transamerica Retirement Survey 2025.

The "Big" Picture

A recent EBRI Issue Brief examined trends in employment-based retirement plan participation, noting that in 2011, the percentage of all workers participating in an employment-based retirement plan was essentially unchanged from the year before. More specifically, the percentage of all workers (including part-time and self-employed) participating in an employment-based retirement plan¹ stood at 39.7 percent in 2011, compared with 39.8 percent in 2010.² At the same time, the percentage of full-time, full-year wage and salary workers ages 21–64 (those most likely to be offered a retirement plan at work) saw a slight decline, slipping from 54.5 percent in 2010 to 53.7 percent in 2011.

While those movements were very small, the increase in the number of workers participating in 2011 halted a three-year decline. Moreover, it’s not as though this gauge has shown a steady trend, even in recent history. When you take into account all workers, the percentage participating in an employment-based retirement plan reached 44.4 percent in 2000, but declined to 39.7 percent in 2006, before increasing to 41.5 percent in 2007—the highest level since 2004, before then slipping back to 39.6 percent in 2009.³

When you look inside the overall numbers, we find that some categories examined had increases in the probability of workers participating and others showed decreases. Not only does the status as a full-time or part-time worker have a major impact on participation rates, the report notes, so does the demographic characteristics of the individual worker, the type and size of their employer, and even their physical location (workers in the South and West were less likely to participate in a plan than those in other regions of the country, for example).

Looking at the overall percentage of females participating in a plan, you might notice that it was lower than that of males—but when you control for aspects such as work status or earnings, the female participation level actually surpasses that of males. If you look only at the participation rate of Hispanics as a group, they appear to lag other groups significantly in terms of retirement plan participation. However, it turns out that only the nonnative Hispanics actually have participation levels substantially below those of all other workers. In fact, nonnative-born Hispanics had substantially lower participation levels than native-born Hispanics, even when controlling for age and earnings.

In responding to big issues, it’s sometimes tempting to look at data only in the aggregate, and in the press of time, to draw broad conclusions from trend lines over remarkably recent history, trying to get a sense of the “big picture.” But as the data above suggest, a “better” picture is often drawn from an analysis of the component parts that make up that big picture, balanced with an appreciation for longer-term trends.

Nevin E. Adams, JD

¹ The number of workers participating in an employment-based retirement plan increased from 60.7 million in 2010 to 61.0 million in 2011, returning to the 2009 level, the second lowest since 1997 and well below the 67.1 million workers who participated in a plan in 2000, the peak year for the number of workers participating in a plan from 1987–2011.

² “All workers” is the broadest work force population group, including those not covered by a retirement plan. A more restrictive definition of the work force, which more closely resembles the types of workers who generally must be covered by a retirement plan in accordance with the Employee Retirement Income Security Act of 1974 (ERISA), is the work force of full-time, full-year wage and salary workers ages 21–64. Under this definition, 60.8 percent of these workers worked for an employer sponsoring a plan, and 53.7 percent of them participated in a retirement plan.

³ An important public-policy topic associated with an analysis of employment-based retirement plan participation is the number of workers who are not participants, as well as the number of those who work for employers/unions that do not sponsor a plan. For example, when taking into account only workers who work full-time, full-year, make $10,000 or more in annual earnings, and work for an employer with 100 or more employees, 15.1 million (or 25.2 percent of the defined population) would be included among those working for an employer that did not sponsor a plan. Another way to look at this last number is that 74.8 percent of workers with those characteristics worked for an employer that did sponsor a retirement plan in 2011. This is explained in more detail on page 30 of the November 2012 EBRI Issue Brief, “Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2011,” online here. See also “’Under’ Covered,” online here.