Retirement plans can also be improved by auto-enrollment and auto-escalation programs that increase employees’ contributions. “Don’t make this hard for people,” Ackerley said. “Women are busy. We juggle a lot. So automatically enrolling people in the plan and automatically escalating how much they save each year—these are best practices that are proven to help women and all people save more.”
Ackerley said it’s also critical that retirement plan designs don’t disadvantage women. “We need companies to think about eligibility. Do they eliminate part-time workers, which would obviously eliminate women? What do they do when women are out on maternity leave or out for childcare? Do [companies] still contribute to the 401(k)? There are sometimes service requirements that can impact women. So we need companies to look at that.”
Women also have a bigger student debt burden: They hold about 58% of outstanding student loans. So 401(k) matches are critical for employees paying down student loans so they can launch retirement savings, Koehler said.
Because women outlive men by five years on average and because the number of companies that offer defined benefit plans has dipped to approximately 16%, BlackRock is also focusing on products that provide lifetime income, Ackerley said.
In 2020, the company announced the development of LifePath Paycheck to help investors create their own pension. The product combines a target-date fund with an option to annuitize for a lifetime income stream. It’s designed to be offered through defined contribution plans.
“It’s for men and women and gives people a little bit more security in retirement, which can really help them think through how they’ll spend as they age,” Ackerley said.
Koehler said it’s important to understand that the face of wealth is changing, so advisors need to know how to engage women investors.
“Women are looking for respect. They’re looking for that trusted partnership and that personal fit and a strategy that is more aligned to their needs or their goals,” Koehler said. She said it’s important for advisors to be active listeners, encourage clarifying questions, and create a collaborative environment. Trust matters, she said.