Retirement has been a hot topic in recent years, as the fallout from the financial crisis put many U.S. workers’ retirement ambitions on hold, if not canceled them altogether. And while the recession brought to light the importance of early retirement investment for younger workers, other employee demographics are not yet fully engaged in retirement planning.
Women, for example, have saved about $41,000 less than men toward retirement on average, according to a recent study by financial services firm ING U.S. Among those who have savings inside or outside an employer-sponsored retirement plan, men have saved roughly $149,000, on average, while women have saved an average of $108,000, the study said.
This may be because women tend to put a lower percentage of their salary toward employer-sponsored retirement plans than men, the study said. About 42 percent of women save just 1 to 5 percent of their salary toward their retirement plan. Meanwhile, men are more likely to contribute a larger amount — a smaller percentage of men (34 percent) contribute between just 1 and 5 percent.
Furthermore, fewer women than men — 25 percent compared to 33 percent, respectively — actually reported having a formal investment plan to reach retirement goals, the study said.
“We see women engaged in the process at much lower levels than men,” said Delia deLisser, ING’s director of women’s marketing.
While saving for retirement is largely a personal responsibility, deLisser said organizations should be stepping up efforts to ensure that financial education and retirement savings resources are made more widely available.
Moreover, because minority groups tend to be the ones in need of greater retirement saving education — another ING study (http://diversity-executive.com/articles/view/1524) found that other minority groups, such as Hispanics and African-Americans, also lag in retirement savings — diversity leaders can leverage their resources by targeting these specific employee groups to make the education process more inviting.
Corporate employee resource groups — also known as affinity groups or networks — are a resource diversity leaders can leverage in this regard. Rhonda Mims, president of ING Foundation and head of corporate responsibility at the firm, said diversity affinity networks are a great breeding ground for candid discussions, including those around retirement savings education and planning.
Because affinity groups tend to meet away from the normal day-to-day, they become an effective tool to educate employees on retirement savings options. “That environment allows [employees] to ask the dumb questions that they wouldn’t feel comfortable asking their boss or manager,” Mims said,
Nancy Dunn, manager of diversity and inclusiveness at General Electric Co., said GE also taps its affinity networks to engage women and other minority groups in conversation and education around retirement planning.
Dunn said GE brought in a financial representative to speak to an audience of women last year as part of a breakout session at its Women’s Network conference. “There is a sort of beauty of inserting this type of material into these forums,” Dunn said. “It’s more personalized to what your situation may be, because you’re associated with that affinity.”
Dunn agreed that leveraging affinity networks for education on retirement saving should be part of a broader push by organizations to ensure employees are provided with resources on financial responsibility. Providing such resources is an important retention driver for organizations. But the most important step for companies is driving awareness among their employees.
“With some of the financial challenges we’ve all faced in the last 10 years, consumers are realizing we have to do it for ourselves,” deLisser said. “And I think that there’s going to be more and more awareness of that — and hopefully behaviors that follow it.”
Frank Kalman is an associate editor of Diversity Executive magazine. He can be reached at firstname.lastname@example.org.