Single women investors seek to control their retirement preparedness

03/12/2024 — Our country is riding a demographic wave that will start to crest as more Americans turn 65 this year than ever before¹. The traditional retirement age may not be the milestone it once was — many delay retirement and continue working past age 65, while others retire sooner than they thought – but as more Americans approach retirement, financial planning should increasingly focus on retirement preparedness. This is especially true of women, and single women in particular, who are navigating unique financial challenges.

The latest Advisor Authority survey, powered by the Nationwide Retirement Institute®, explored the financial planning considerations that are common among single women investors and uncovered insights to help financial professionals focus on proactive solutions.

Confronting the barriers to financial security

Preparing for retirement has long been a challenge for many women given historical pay inequality. Many women also lose time saving for retirement and building wealth by leaving the workforce to care for children and family members. Then there’s the fact that women tend to live longer than men, which means they need to plan for a longer retirement.

Yet the immediate challenges of the current economic climate, such as inflation and fear of a recession, are also affecting the retirement confidence of women. Seven out of ten women surveyed said they are rethinking if and when they can retire because of these economic concerns.

Single women in particular are feeling the impacts of economic uncertainty. According to our survey, single women are:

• Less optimistic than married women about their financial outlook for the next 12 months (31% of single women said they’re optimistic vs. 39% of married women).
• More worried about their ability to afford their monthly bills in retirement, due to the rising costs of living (44% of single women are worried vs 34% of married women).

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Ready for the opportunity to build retirement confidence

Meeting today’s financial needs demands clear guidance and specific steps that women can take to improve their retirement preparedness. Our survey also found that single women tend to be more proactive in working with their financial professionals in planning for retirement. Our survey results lay out a roadmap financial professionals can follow when working with their female clients.

Many single women have already taken proactive steps to improve their financial outlook by establishing working relationships with a financial professional. More than two in five (41%) single women with a financial professional began working with them in the last 12 months. Among single women, the most common topics they are frequently discussing with their financial professionals include tax planning (37%), building sufficient retirement savings (34%) and converting accumulated savings to retirement income (27%).

That’s a trend many of us in the financial services industry expect to grow in the coming years as a significant share of wealth is transferred to younger generations. By 2030, Gen X and Millennial investors are expected to inherit as much as $30 trillion in wealth held by Baby Boomers.² A fair share of this wealth will be in the hands of Gen X and Millennial women.

From the financial professional perspective, this represents a business-building opportunity to help women investors achieve their long-term goals. Nearly all financial professionals who responded to our survey feel well-equipped to serve the needs of their women clients (96%). Moreover, nine in ten financial professionals plan to grow the number of women clients in their practices over the next 12 months, an 11-percentage point increase since August 2023.

While those numbers are encouraging, there’s still work for financial professionals to do to build trust and confidence among women clients. Just around half of single and married women (47% and 51%, respectively) who pay to work with an advisor or financial professional feel that person understands their financial goals at this stage in their lives.

A full-circle focus on financial planning

As you look to grow the share of women clients in your book of business, keep in mind that their unique experiences have influenced their needs for financial and retirement planning.

For many women, preparing financially for the future is not about one thing. There are many aspects to retirement preparedness and a holistic plan that factors in the opportunities and the challenges. That holistic plan should include these aspects:

• Retirement income planning to convert retirement savings to retirement income in a tax-efficient manner.
• Retirement health care cost and longevity planning to cover expected and unexpected medical expenses over a long retirement.
• Legacy and estate planning to ensure a client’s wealth can be preserved for beneficiaries and younger generations.