Women and Retirement: What the Studies Show

It’s not news that women face unique challenges throughout life, financially and otherwise. What is news, however, is the data underlining the problems. More than half of single women and 41 percent of married women say they feel either a moderate or a lot of anxiety about their personal financial security. This is certainly not a positive. What’s going on?

Single Women

According to the U.S. Census Bureau, more than half of all women in retirement are single, whether it be through widowhood, divorce or life choices. As single women, they are carrying the burden of debt on one income, which can include anything from mortgages to auto loans to student loans to credit cards and beyond. Plus, if they are single mothers, the cost of raising children, or having raised children earlier on, can add to the strain as well. In March, the 2016 Retirement Confidence Survey was published by the Employee Benefit Research Institute, showing single women in the U.S. are more likely to be in financially uncertain positions compared to married women and all men when it comes to retirement savings. This is a pretty sobering thought.

All Women

A Transamerica survey found these statistics:

  • 51 percent of women plan on working after they retire.

  • Only 12 percent of women are “very confident” in their ability to fully retire with a comfortable lifestyle.

  • 81 percent of women are concerned that Social Security won’t be there for them when they are ready to retire.

  • 28 percent of women work part-time so are less likely to have workplace retirement benefits.

For the 51 percent of women who plan to work after retiring, this work could be essential not just to their sense of purpose, but to their ability to provide for themselves. They do not believe Social Security will be available at all to supplement their retirement, and they certainly do not believe they have the ability to fully retire and maintain their desired lifestyle, whether they are saving for retirement or not.

The Big Why

One of the most telling reasons for women’s anxiety over their futures and their precarious financial positions is a lack of financial planning. Let’s take a look at why women aren’t being as financially prepared as men.

Past research from Harvard showed that women have different negotiating styles, sometimes deferring to the authority of men. In these instances, women are more likely to compromise their needs. This negotiating difference can impact initial earnings, as well as how they manage their long term financial planning. Research also suggests that both men and women traditionally are more likely to see men as better decision makers in long term financial matters, as many women are not confident in understanding investments. Obviously, this is not always the case, and many times, women communicate their needs differently when working alone with a female advisor.  

The Need for Financial Planning

Between the vocabulary and the paperwork, the financial industry can be difficult to navigate alone. Additionally, financial planning options can be vast and wide, and most people find it daunting, whether they have experience or not. This in itself makes having a financial advisor crucial. And yet, according to the Transamerica report, only 36 percent of women use a professional financial advisor, but 52 percent of women say information that is easier to understand would motivate them to learn more about retirement.

The good news for women (and men) is that it is never too late to consider strategies to manage lifetime income, and a financial advisor can help. A financial advisor can assist in prioritizing needs and assessing risks at any stage. Whether you are already retired or planning lifetime savings strategies for the future, a financial advisor can encourage active and confident planning for financial health.

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

“Finance Made Simple” blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.

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