Inclusion in Retirement Planning

As U.S. Bureau of Labor Statistics (BLS) reporting shows, the actuarial profession, with more than 30,000 people employed in 2023, projects demand for actuaries to grow by 21% through 2032. This growth indicates not only new job creation but also a potential need to replace retiring actuaries.

The concept of retirement has traditionally symbolized a golden chapter in life—a time to relax, travel and enjoy the fruits of years of hard work. However, I’ve observed that beneath the surface of retirement lies a reality: not everyone has an equal shot at a secure and comfortable retirement. Without targeted interventions, millions risk outliving their savings, relying solely on Social Security or falling into extremely difficult financial situations in retirement.

Retirement Planning Isn’t One-Size-Fits-All

The numbers show that the workforce is changing. Women make up nearly half of all workers, people of color are the fastest-growing segment of the labor force and nontraditional employment is becoming the norm. I believe our retirement system must evolve to meet these shifts.

In theory, retirement planning is simple: save consistently, invest wisely and watch your savings grow. In practice, systemic barriers have left entire groups of people excluded from this process. Reports show that lower-income families frequently have no retirement savings at all, and those who do often rely heavily on Social Security, which may not cover essential expenses. For these groups, the traditional retirement planning advice of “max out your 401(k)” simply doesn’t apply. Here are three talking points:

1. The gender retirement gap. As World Economic Forum reports show, women retire with an average of 30% less savings than men. The reasons range from persistent wage gaps to career interruptions for caregiving and longer life expectancies. Women are more likely to outlive their savings and face poverty in old age. Nearly 50% of working women worry they’ll outlive their retirement savings, compared to only 35% of men​.
2. Racial disparities. Systemic inequities in wealth accumulation have left many families of color unprepared for retirement. Black and Latino workers often have lower incomes and less access to workplace retirement plans than their White counterparts. According to the Economic Policy Institute, the median retirement savings for Black families in the U.S. is only $29,200, compared to $79,600 for White families (statistics from 2016). Furthermore, approximately 64% of Hispanic workers and 53% of Black workers lack access to workplace retirement plans, compared to 45% of White workers. This disparity underscores the structural barriers many face in building a secure financial future.
3. The gig economy problem. Nearly 36% of Americans work in the gig economy or hold part-time jobs. Said differently, over 57 million gig workers in the U.S. often lack access to employer-sponsored retirement plans (reports from 2021). Many of these workers don’t have access to employer-sponsored retirement plans, leaving them to navigate saving for retirement entirely on their own. Lower-income individuals typically have fewer resources to save for retirement. Many work in jobs without retirement benefits or have wages that do not allow for significant savings. In contrast, higher-income earners are more likely to have access to employer-sponsored retirement plans, investment opportunities and tax advantages, allowing them to accumulate wealth over time.

Inclusion Isn’t Just Fair—It’s Smart

Inclusion in retirement planning isn’t just about fairness; I believe it’s about creating a stronger, more resilient system that works for everyone. Promoting lifetime income solutions can help ensure that savings last a lifetime. Offering annuities as part of retirement plans can make a significant difference; for example, companies like Teachers Insurance and Annuity Association of America (TIAA) offer lifetime income to help protect employees from market volatility while allowing them to take advantage of potential long-term market growth. Two talking points:

1. Educate and empower underserved communities. Financial education should go beyond general advice and address specific challenges of underrepresented groups. Many individuals, particularly those from lower socioeconomic backgrounds, may lack access to financial literacy programs. Understanding the importance of retirement planning, the various investment vehicles available and the role of government benefits is crucial for long-term financial security. A lack of education and guidance can perpetuate financial insecurity into old age. Tools, workshops and culturally relevant resources could empower individuals to take control of their retirement journey.
2. Expand access to retirement savings plans. I believe employers and policymakers should prioritize offering retirement plans to nontraditional workers, such as part-time employees and gig workers. State-sponsored savings programs, like auto-enrollment IRAs, CalSavers and OregonSaves, are steps in the right direction. Governments can implement policies that provide access to retirement savings plans for all workers, regardless of their employment status.

A Time for Change?

Inclusion in retirement planning isn’t just a matter of fairness; I believe it’s a reflection of our society’s values and priorities. Financial insecurity in retirement puts strain on families, communities and government resources. If we fail to address these gaps, we’re setting ourselves up for a future where the wealthiest retire comfortably, while others are left to struggle. By breaking down barriers and ensuring that everyone has access to the resources they need to save for the future, we can build a system where financial security is within reach for all.

Actuaries play a pivotal role in promoting inclusion in retirement planning by leveraging our expertise to design inclusive retirement plans, such as portable plans for gig workers, low minimum contribution thresholds and customized lifetime income products. Actuaries can also work with fintech to develop technology-driven solutions to help make retirement planning more accessible, such as designing apps or calculators tailored to underserved workers or creating automated systems that encourage consistent saving habits.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.

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