And now, a significant 70% of women say that inflation and signs of a potential recession have made them rethink if — and when — they can retire, according to Nationwide’s ninth annual Advisor Authority survey.
Further, women are broadly feeling less financially secure, said Ann Bair, senior vice president of marketing for Nationwide Financial.
“In fact, only 36% of women are optimistic about their financial outlook over the next 12 months,” she added.
Inflation and Pay Disparity
Bair noted that the general pay disparity between women and men is likely driving these concerns, with women in the United States earning 84 cents for every $1 earned by men, according to the National Women’s Law Center.
And as inflation continues to push the price of consumer goods, the effect may be felt more heavily by women than their male counterparts, she said.
“Women also tend to be more conservative in their investing strategies, putting themselves at a potential disadvantage when inflation spikes,” added Bair. “Women are navigating immense uncertainty, with some of us raising families or caring for aging parents while living longer and facing higher healthcare costs.”
The survey findings reflect this sentiment, as managing expenses and monthly payments has become more challenging as the cost of living continues to rise.
Indeed, 43% of single women and 40% of married women reported that increased cost of living posed one of the biggest long-term challenges to their retirement portfolio.
Challenges More Prevalent for Single Women
While many women are feeling less financially secure in the current environment, single women are facing unique financial challenges. Only reported 31% feeling optimistic about their financial outlook over the next 12 months as compared to 39% of married women, the survey found.
Managing debt is another big financial concern in the next year, with 31% of single women aged 55 or older — or retired — expecting to be paying down credit card debt in retirement.
“Single women are planning for retirement without the balance provided by a partner’s savings and income, possibly impacting their outlook,” said Bair.
In turn, she added that financial advisors can help by focusing on topics such as planning for long-term financial independence and building an emergency fund, as their single women clients may not have a second income to fall back on during unexpected situations.
What Can Women Do to Alleviate These Concerns and Be Better Prepared for Retirement?
Tax planning strategies, accumulating sufficient savings to enter (or stay in) retirement and converting accumulated savings into retirement income rank among the most common topics that single women are talking to their financial professional about, the survey found.
Yet, while many women are proactively discussing retirement planning with their advisor, they are not feeling confident in their strategies, said Bair. She added that less than half — 45% — say they have a strategy in place to protect their assets against market risk in 2024.
In addition, Bair said that past surveys have found that women investors rely on Social Security, dividend yielding stocks and defined benefit plans or pensions.
“While these are good strategies, most do not provide guaranteed income, or may not provide an adequate amount for a long period of time,” she added.
According to her, the best thing women can do to be better prepared for retirement is to work with an advisor, or meet with their current advisor, to ensure their plan is on track.
“Look for an advisor who can be a partner in planning for the future, offering financial guidance as well as the knowledge needed to make informed decisions,” added Bair.
Finally, she indicated that, in another recent survey asking women aged 60-65 what advice they would offer to their younger selves, women offered actionable advice for investors of all ages and income levels.
“They said to expect that you’ll need more money than you think, don’t assume you can work for as long as you’d like and to start saving and planning early, without living above your means,” added Bair.
