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When it comes to clients’ areas of emphasis for 2025, advisors should expect that retirement planning will loom large. Advisors should also expect that will certainly be true of women.
That scenario is accentuated by women are also are also delaying retirement and reducing funding to that effect in order to help loved ones deal with elevated personal expenses. Not surprisingly, that drags on their retirement outlooks and over financial well-being. Throw in the fact that on a dollar-for-dollar basis women earn less than men and retirement planning for female clients takes on added importance.
It’s an endeavor advisors should pursue because over the next decade, women will control trillions of dollars of wealth. Perhaps equally as important as the vast dollar amounts that women will control in the years ahead are the points that they want to leave legacies and have more control over their retirement realities.
Costs Rain on Retirement Parades
Regardless of gender, it’s common for clients to fret about their retirement realities against the backdrop of (presumably) no paychecks and living mostly off of investments and social security. One way of looking at that sentiment is that extra preparation can go a long way toward improving retirement reality and women are likely to be receptive to that preparation because what their retirements actually are often don’t align with previous expectations.
A recent study by Corebridge Financial confirms as much. The survey says just 19% of women are finding retirement to be as expected while 26% say retirement as been full of surprises, many of them related to costs. In fact, half of the women polled said they’re finding retirement to be costlier than anticipated and one reason could be that 46% of those queried said they stopped working earlier than expected.
“While 51% of retired women describe their current financial health as good or very good, 63% wish they began saving earlier, knowing what they know now,” according to the research firm. “Just 27% say they began saving and investing between the ages of 18-29. Taking that a step further, 42% of retired women say they did not begin prioritizing their financial and retirement planning until 41 years old or later, and 20% said they still have not started.”
Translation: advisors with young female clients should push them to maximize retirement savings today and leverage the advantage of youth while Gen X and baby boomer female clients that are still working should be encouraged to up their retirement savings via applicable avenues to avoid surprises on the cost front down the road.
Advisors Are Important
There’s a difference between bragging and articulating a selling point with education and facts. When it comes to investing and retirement planning, women want more of the latter and none of the former. Fortunately for advisors, the facts are there to encourage female prospects to make the transition to client. Namely, women that worked with advisors benefitted from that relationship.
“Among retired women, the number one financial step they say they got right in their preparation for retirement is working with a financial professional, cited by 35% of respondents,” adds Corebridge. “Though 38% of retired women working with a financial professional wish they began that relationship sooner. Saving early and contributing more to their employer retirement savings plan rounded out the top three actions retirees felt helped prepare them for retirement.”
Bottom line: there are strong ties between working with a financial professional and increased confidence and satisfaction among investors. Importantly, women that do so are generally more optimistic in their retirement outlooks than those not working with advisors.