While many of the retirement provisions within the Secure 2.0 Act may be useful for any investing American, some financial advisors are emphasizing that women in particular may reap the most benefit from the law's changes.

It all comes down to the increased options in the act that can align with and support the challenges women face in retirement, they said, such as fewer assets overall due to pay disparity, breaks in employment for childcare and eldercare, and a longer lifespan than male counterparts.

Jennifer Huisking, vice president of Goldman Sachs Personal Financial Management in Westport, Conn., said the legislation should be "wonderfully refreshing" for women clients and their advisors. “Women aren’t intending to sideline their careers and future security. But they often find that’s what happens,” she said.

As more women have become the main clients of financial advisors, not just the spouse of a client, advisors said they have seen that female investors view their finances through a slightly different prism than male investors and often don't have their needs addressed.

“We need to meet women where they are and value those decisions, but also show them the impact of that, without judgement, so they can go forward with confidence and a sense of control,”  Huisking said. 

Goldman Sachs researchers in December reported that 50% of women say their retirement savings is behind schedule, compared with 35% of men. Two four-year periods out of the workforce—one for childcare, one for eldercare—can reduce a woman’s retirement savings by as much as 35%, the report said. 

The study also found that women were having difficulty generating income in retirement, with researchers noting that 70% of pre-retirement income is usually the target that advisors strive for.
In the survey, 80% of retired women respondents said they are under the 70% target, compared with 70% of men. Also, 58% of women respondents said they generate less than 50% of their pre-retirement income in retirement, compared with 44% of men. Only 20% of women and 30% of men said they generate more than 70%.

“Though women juggle the same types of financial responsibilities as men, more women report that these factors impact their ability to save for retirement,” the report concluded.
A similar report by Cambridge Investment Research, a Fairfield, Iowa-based financial services consultant affiliated with the RIA of the same name, said that women have a different approach to investing. The report said that advisors who don't meet women's needs risk losing out on part of the $30 trillion in wealth transfers expected in the U.S. by 2030.


“Many women clients have different values, goals, approaches, and communication styles,” the firm acknowledged in its report last year. “Financial professionals who fail to make the necessary adjustments may struggle to build strong relationships with women investors.”

Leslie Geller, senior vice president and wealth strategist at Los Angeles-headquartered Capital Group, said women and their advisors should welcome Secure 2.0.

“SECURE 2.0, far more than the original SECURE, presents more options and opportunities for different people to save for retirement differently. And I think it’s especially impactful for women because saving for retirement is far less of a one-size-fits-all approach for women and finances,” she said.

Areas of Secure 2.0 could play into a woman’s investment style, Huisking and Geller said, and financial advisors should use these opportunities as a reason to sit down with their female clients and advance a conversation.

They said the following provisions should be of particular interest to women:

• Required Minimum Distributions – Of all the changes, this one has gotten the most press, Geller said. In 2023, the age that triggers the dreaded RMDs rises to 73, and to 75 in 2033. That's a minor increase for today’s 72-year-old. But for women who are 62 this year or younger, it's a much more significant bump.

• Catch-up contributions for 401(k) and 403(b) plans, governmental plans and traditional IRAs — Catch-up contributions are especially helpful for women who took time out of their careers for childrearing, Huisking said. While nothing can make up for the lost time value of money, salting away more assets starting now to grow through retirement is the next best thing. All forms of catch-up can be used to cover career interruptions and speak to a woman’s longevity.

The first adjustment to catch-up contributions for 401(k)s and the like is the typical increase that comes every few years. In 2023, employees contributing to an employer plan who are 50 years old and older can make a catch-up contribution of $7,500 on top of the $22,500 maximum regular contribution.

The second adjustment is a brand-new initiative for employees 60 to 63. Beginning in 2025, the will be able to contribute 150% times the typical catch up or $10,000, whichever is greater.

• 529 rollover to Roth – Saving for a child’s education is a high priority for a lot of women, but with the explosion of entrepreneurship among young people, there might be hesitancy to lock up funds purely for college. This new provision removes that, as 529 funds not used for education can be rolled into a Roth IRA tax and penalty free, up to $35,000.

• New benefits for part-time employees — According to statistics from the U.S. Department of Labor, women make up the majority (64%) of part-time workers. So the fact that beginning in 2025 employers will have to make their 401(k) plans available to their long-term, part-time workers is a boon for women who work part-time in order to also care for young children. Long-term, part-time workers will be defined as those working at least 500 hours a year for at least two consecutive years.

• Automatic enrollment — Beginning in 2025, employees will no longer have to actively opt in to new employer 401(k) or 403(b) plans. This is an excellent provision for women to take advantage of the time value of money, they said. The deferral amount will start at 3% in 2025 and increase 1% a year to 10% unless the employee opts out.

• Save for retirement while paying off student loans – For a client repaying a student loan, she can still get an employer matching contribution on the repayment amount under a 401(k), 403(b) or 457 (b), even if she’s not contributing to the plan. These contributions, beginning in 2024, could mean she’d be able to pay off student loans and start saving for retirement at the same time.

They also noted that the legislation contains numerous new provisions that allow account holders to access account assets for emergencies.

These include the waiving of penalties for early withdrawals in the case of terminal illness, waivers for domestic violence victims and penalty-free emergency withdrawals of up to $1,000 per year.

“This access to savings for hardship for illness, domestic abuse or disaster gives client peace of mind that they can prioritize savings knowing it’s not inaccessible if something comes up,” Huisking said. “The concept of securing our retirement is about having more security, more flexibility, more control over the future. Secure 2.0 gives us that control knowing that getting to retirement is not set out in clear stages for women.”