Women outlive men, and garner lower wages in the workplace. Together, these trends lead to a dire discrepancy when women look to retire.

An analysis from Hewitt Associates, Total Retirement Income at Large Companies: The Real Deal, addresses the fact that women live about 22 years after retirement, compared to men who live 19 years once retiring. Based on current trends, Hewitt estimates that only 1 in 5 Americans will be able to meet their financial needs in retirement. Two-thirds are expected to have less than 80% of their projected needed funds.

Hewitt figures that women need to replace 130% of their final pay at retirement. The typical income-replacement metric today is between 70 to 90% of pay.

To solve this problem, Hewitt recommends that employees take the following actions:
  • Increase savings rates in 401(k)s and other personal investment vehicles
  • Be smarter investors
  • Find lower fund management fees
  • Delay retirement.
Health Populi’s Hot Points: The most concerning line item in the retiree’s personal budget is health care costs. Hewitt found that employer-subsidized retiree medical coverage has a huge impact on the employee’s ability to fund adequate retirement savings.

Medical costs racked up after retirement can quickly eat up retirement savings — even if Medicare is in place.
For more on this personal fiscal challenge, see my repeated mentions of the important EBRI studies in Health Populi:

Declining confidence in retirement finances — EBRI finds growing health insecurity: https://www.healthpopuli.com/2008/04/declining-confidence-in-retirement.html
The median retirement health nest egg for a married couple in 2018 = $154,000 to $376,000
Values vs. value in consumer-driven health care
With women even more vulnerable than men in this situation, Women’s Bureau of the U.S. Department of Labor offers Wi$eUp, which provides tips on saving and financial security.

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