Overlook the flowers for Mom’s Day and get retirement financial savings for moms

Even before the COVID-19 pandemic, retired women were understaffed.

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According to the National Retail Federation, Mother’s Day spending is expected to hit a record $ 28.1 billion this year, up $ 1.4 billion from last year. Can you imagine so much money going into women’s retirement accounts this month instead of dealing with flowers and gifts?

Of course, that won’t happen. We all love to pamper the mothers in our lives with bouquets and other gifts on their special day. And from a practical point of view, many employees do not even have a retirement account to which they can deposit retirement assets.

But one thing we can all do on Mother’s Day – commit to finding solutions that will provide women with greater security in retirement.

Many Americans struggle to save for retirement, but women face even higher hurdles. Causes include the gender pay gap, longer lifetimes and greater responsibility for care.

The economic outlook for women has deteriorated due to the COVID-19 pandemic. More than 2.3 million women have left the workforce since February 2020, with female labor force participation falling to 57%, its lowest level since 1988.[1] Over time, this is likely to be reflected in the worsening gap between women’s retirement assets.

Even before the COVID-19 pandemic, retired women were understaffed. Older women receive around 80% of the retirement income that older men receive, an inequality that reflects the gender pay gap. In particular, women 65 and over had a median retirement income of $ 47,244 in 2016, which is 83 percent of the median household income for men, at $ 57,144.[2]

Given their lower savings and the multitude of economic challenges women face, it is not surprising that women are more concerned about retirement than men. In December 2020, the National Institute on Retirement Security surveyed working-age Americans about their views on retirement. We took a closer look at women’s moods and found that women are indeed more concerned about retirement than men.

More accurate:

– 60% of women said they were concerned that they would not be able to achieve financially secure retirement, 30% were very concerned. For comparison: 51% of men are affected.

Women worry about retirement.

National Pension Insurance Institute

– Almost three quarters of women (71%) agree that the average worker cannot save enough on their own to ensure a safe retirement. Men were at 65 percent.

– Almost two thirds of women (63%) say that the future will only make it more difficult to prepare for retirement.

We also asked why retirement is becoming more difficult. Women said the two most important factors are the rising costs of health care and long-term care. This is not surprising as women live longer than men, which means they are more likely to face higher health and long-term care costs in their retirement years. Other important factors were inconsistent wages, lack of pensions, longer lives, rising debt and do-it-yourself retirement plans.

But what can be done to improve the economic security of women in their older years? The problem seems daunting, especially when women and families try to take steps unaided. The more effective approach would be for policy makers to develop solutions that update the functions of the retirement infrastructure to meet the needs of women in the 21st century.

Policy makers can take steps to improve women’s retirement prospects.

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For example, when Congress is considering whether and how to expand social security, adjusting spouse benefits and providing care loans in social security would make a significant difference for women. In addition, states could introduce better family vacation policies to make it less criminal for women to take time to look after caregivers.

Both Congress and state lawmakers could consider lifting the Earned Income Tax Credit (EITC) age limits permanently so that low-income women of all ages could receive that income boost. Finally, creating a universal savings vehicle for all women, including those in caring positions, would enable working women to save for their retirement even if their employer does not offer a plan.

The problem of the retirement savings gap will certainly not be resolved overnight. But we all owe it to the mothers in our lives that securing old age for women is a top priority on Mother’s Day and every day.

[1] National Women’s Rights Center, another 275,000 women left the workforce in January and February 2021.

[2] National Institute for Old-Age Insurance, still short-term, May 2020.

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