Retirement Challenges Loom Larger for Women

My Comments: Women comprise a large percentage of my clients. Some of that is because I’ve been doing this for a long time and many of the husbands have died already. It makes we wonder sometime how my wife will manage financially without me but I think I’ve set enough in motion that she’ll be OK. At least I hope so. Because statistically at least, I’m going to leave the building first.

But at the macro level, this is a real issue since it’s not unusual to find people living longer in so-called retirement than they lived in the employed world. And if you are 83, it’s rare to find employment if you need additional income. And that assumes you don’t have limiting health issues.

I’ve spent most of my professional life looking for realistic solutions to these problems. And I can say with confidence that I’ve been successful, otherwise I’d have had to find something else to do. I’ve got bills to pay like everyone else. Hopefully my wife will be able to pay hers. (Click on the retirement image above to see what I recommend.)

By Philip Moeller | U.S.News & World Report LP – Mon, May 6, 2013 11:44 AM EDT

It took a recession, but women have stepped up their interest in financial planning as well as retirement planning and investing. It’s a good thing, too, because retirement is a major women’s issue.

Women earn less than men but outlive them by several years on average, meaning women’s smaller retirement nest eggs must cover longer periods of retirement. And married women are likely to be widows later in life, often causing their income to fall and stress level to rise. Nursing home residents are overwhelmingly women, and many are in or near poverty in their later years.

According to a recent survey of 2,000 women ages 35 to 75 with household incomes of at least $30,000 a year, 62 percent reported an active interest in investing, planning and retirement topics. Survey sponsor Allianz Life Insurance Co. of North America asked the same question in a 2006, and only 35 percent of women at that time expressed similar interests.

Nearly half of the women polled in both surveys were worried they would run out of money later in life. That number rose from 46 percent in the 2006 survey to 49 percent in the 2013 survey.

Due to the recession and its tough aftermath, “many women got a wake-up call and said, ‘I have to pay attention to this, even if I’ve delegated it to my husband,'” says Katie Libbe, Allianz Life’s vice president for consumer insights. “She can’t just delegate it – she really needs to understand it.” Libbe says there is more than a 50 percent chance that a woman will outlive her husband, so women must be prepared to understand retirement planning and investing, and be prepared to make decisions.

In married families, women are the major investment decision-makers in only about 23 percent of the households. But they are the majority decision-makers in most other situations. For households with income less than $80,000, women make the primary investment decisions in 53 percent of the households, and this percentage rises to roughly 71 percent for households making between $80,000 and $200,000 a year. In more affluent households, women handle major investment decisions more than 46 percent of the time. By age, Allianz Life found, roughly 60 percent of women between 25 and 54 were primary household investment decision-makers, versus about 47 percent for households with older women.

Despite the growing recognition of the importance of retirement issues, Libbe says, the survey found that women are frustrated by poorly presented information that seems more designed for men. And nearly 70 percent of them have a dim view of their financial advisers, even though nearly all women – 90 percent – said they need to be more involved in financial planning than in the past.

“I think that what this tells us is that the [financial services] industry still has a ways to go before they really connect with women,” Libbe says. “I do think we’ve gotten better. For example, we’ve told our financial advisers that the women’s role in the relationship needs to be recognized as that of a partner. Otherwise, she will fire you when the man dies.”

More importantly, she explains, financial materials and presentations often are geared to men and not women. Men tend to like details and investment bells and whistles, while women are more interested in security and achieving lifestyle goals.

“The retirement lifestyle is not about a five-star fund and is not related to anything on Wall Street,” Libbe says. “Women are willing to say, ‘I don’t need to get the best return as long as I get a decent, steady return with more protection.'”

“The investment materials themselves are not always written with a kind of Mars-versus-Venus type of difference in their audience,” she adds. “We need to make our materials much clearer in how they support the benefits … and not all about the product features. That stuff is geared toward men.”

The divergence of women’s and men’s financial-information goals emerged in the survey. “The vast majority of women surveyed noted they are more concerned about attaining a retirement lifestyle than gaining specific investment guidance,” Allianz Life reported in discussing the survey findings.

The percentages of women interested in specific topics is revealing:
• Getting guidance about the stock market: 58 percent
• Personal-finance basics: 67 percent
• How to invest and plan for retirement on a modest income: 75 percent
• Guidance on guaranteed lifetime income: 85 percent
• How to achieve their desired lifestyle in retirement: 85 percent

“The top financial topic that women said they most want to learn about – attaining a retirement lifestyle – is not likely the top focus for many financial professionals,” the company said. “Women are asking for clear and simple-to-understand financial information that is available on the Internet.”