Women, part of the wave of baby boomers reaching ‘peak 65,’ are more likely to struggle in retirement, research finds

In the upcoming decade, the baby boomer generation, the largest generation in American history, will reach the age of 65, with women making up the majority.

A recent study by the Alliance for Lifetime Income has found that women face greater financial risks upon retirement compared to men.

One key factor driving this disparity is the persistent gap in earnings between men and women.

As savings accumulate from earned income, this gap in earnings translates into a lower savings balance for women.

Additionally, women tend to live longer than men, resulting in a need for more funds to sustain their retirement years.

The study highlights a significant shortfall in retirement assets for women, with women having lower balances in various types of retirement accounts, including 401(k) plans, IRAs, and savings accounts.

Similarly, the median Social Security benefit for women is 33% lower than that of men.

Further contributing to the challenge is women’s lower average risk tolerance, which influences potential investment returns.

Furthermore, women often bear the responsibility of caregiving, which may necessitate career sacrifices and reduced income.

To address these root causes and improve retirement outcomes for women, various measures are necessary.

Employers can play a role by examining and addressing pay disparities and offering support for caregivers.

Additionally, the financial industry should make expert guidance accessible to women and simplify solutions and products.

By understanding these challenges and implementing effective strategies, we can strive to create a more financially secure retirement for the peak baby boomer generation.