Most women do not save enough for retirement. Their employers could help put them on a better path. (istock)

Five of six women are not saving enough for retirement, according to the latest research from Aon Hewitt, a benefits consultant firm.

But employers can and should take steps to help women close the gap, according to Aon Hewitt.

While women and men are participating in employer-sponsored 401(k) plans at the same rate, women are saving less. Eighty-three percent of U.S. women are not saving enough to meet their needs in retirement, vs. 74 percent of men.

“Women, in some cases, are hit repeatedly throughout their career or dinged throughout their career in saving for retirement,” says Virginia Maguire, director of retirement products and solutions at Aon Hewitt. “They start at a lower salary scale. To save the same percentage (as men) would be a smaller dollar amount a month. Often women take a break in service, so they have a smaller (retirement) balance.”

Adding to the problem, Maguire says, women take more emergency withdrawals and loans from their 401(k) savings than men, don’t save as high a percentage of their salaries and they generally don’t use the 401(k) catch-up provisions. The catch-up allows employees over 50 to save an additional $6,000 a year in their 401(k), in addition to the annual $18,000 limit.

“When we look at withdrawal and loan data, it is incredibly telling,” she says. “Often loans and withdrawals do not have anything to do with their retirement plan. It’s because they don’t have emergency savings, or they have health issues.”

The company says employers can help women close the retirement savings gap by:

1. Offer tools such as health care and financial market education, budgeting and debt management to help women better manage day-to-day and long-term financial plans

2. Provide professional help with investments.

3. Add features to their plans to help increase savings rate, such as automatic contribution escalation features.

Read more

On women’s path to retirement security, there are plenty of hurdles

Even in retirement, men and women are different

Why women still can’t beat men when it comes to retirement savings

She revamped her retirement plan after a divorce. Is she on track?

Question of the week

Are you saving enough for a comfortable retirement. If you are already retired, are you confident that you saved enough to last? Send comments to rodney.brooks@washpost.com. Please include your name, city and state. In the subject line put “Saving for retirement.”

Last week’s question

Do you have three to six months of expenses tucked away for emergencies? If not, how do you handle those big, unexpected financial emergencies?

Alan K. Homer  wrote:

This was a multi-year process. I started saving by pulling $20 to $30 a paycheck and putting it into a separate savings account. I also set up a line of credit at my credit union or bank for any overages on unexpected bills. This eliminated any NSF fees and allowed me to take advantage of any good deals that came along. The interest rate was lower than credit cards and it allowed me to minimize any interest that I paid. If there was an unexpected bill that was greater than my emergency fund, I would dip into my line of credit.

The next step is when I purchased a home, I set up a home equity line of credit, which had a lower interest rate than the lines of credit. This was used for major purchases for the home, children’s college, car and unexpected emergencies.

As the emergency fund grew, the need to use the line of credit became less and less. This allowed me to focus on paying off the first mortgage, which had an interest rate higher than my Heloc.

The key is deriving satisfaction from seeing debt shrink and the comfort of seeing funds grow, even in this little to no rate environment for savers.

I now have emergency funds that are tucked away in several categories. Savings, money market and dividend bearing stocks.  It’s currently at a one year balance of estimated expenses.  Note, this took 5+ years to accumulate and the balance continues to fluctuate.  I did not feel I’m missing out on things while accumulating these funds.

Chad Crabtree of Elkhart, Ind.:

I have made some bad financial decisions in my past and attempting to ‘right the ship.’  I have two bank accounts: one that is my primary for everyday purchases, etc., and the secondary is where I put 7 percent of my salary, mostly forgetting it is there until I am am like  “How am I going to pay for that?” then remembering my secondary account.  I had been paying more on my car payment, but after talking with a mortgage lender, I’m paying the minimum and using the extra (about $100) to stockpile for a down payment on a house.

Rick Steger of  Carbondale, Ill.: 

Have an emergency fund but if one pays off credit cards every month, they will have a source of emergency funds.  It doesn’t make sense to have credit card debt at 12 percent interest, so one can have a savings account with almost no earned interest.

The Washington Post's Jonnelle Marte gives helpful tips to avoid frequent mistakes made by people while preparing for retirement. (Ashleigh Joplin,Jonnelle Marte/The Washington Post)

My most recent retirement column:

After you’ve saved for retirement, annuities can help put your nest egg to work

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Write Brooks at The Washington Post, 1301 K St. NW, Washington, D.C., 20071, or rodney.brooks@washpost.com. On Twitter @Perfiguy. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read more, go to washingtonpost.com/business