Women, Wealth & Wisdom: ReWIRE your retirement planning for one

, Women, Wealth & Wisdom: ReWIRE your retirement planning for one

Retirement planning today may look different for women than men, regardless of marital status.    

By Cindy Alvarez – Senior Wealth Management Advisor

Married women traditionally had been better off in retirement than single women, and two-earner households have fared best of all. But several trends demonstrate that the retirement prospects for married and single women are not as far apart as they once were.

In large part, Alicia Munnell says it’s because women will spend only half their adult lives married. According to research from Boston College, fewer women get married; when they do marry, they get married later; and more women end up divorced.

Even among married women, Munnell says the risk of running out of retirement funds is growing, driven by two-earner couples who get less from Social Security relative to their earnings (due to the decline of the spousal benefit) and save less in 401(k)s when only one spouse has coverage.

These trends suggest that women view their finances separately from men for retirement security, regardless of marital status.

Reshaping Prospects

Traditional perspectives on retirement savings run deep but current trends suggest we rethink our views. A March 2018 survey by FINRA Investor Education Foundation found that women score lower than men on financial- and investment-literacy tests and that women are also less confident in education around finances. This gender-based gap may impede women’s “ability to accumulate and manage assets and, ultimately, secure a promising financial future.”

Women commonly think they should be doing more to close this knowledge-based gender gap but only a subset of women are actively focused on financial independence. A March 2019 UBS study shows that the majority of women worldwide defer long-term financial decisions to their spouse. Few (23%) take the lead in managing their own long-term finances. And a surprising majority (56%) of married millennial women in the U.S. aged 20-34 are looking to their spouse to provide financial security.

It’s with single women where we see the shape the future. Single women are more financially independent and involved in their personal finances than married women. They take ownership of their financial future, knowing that if they don’t make the tough, long-term decisions on retirement, no one else will.

What’s important to you

Considering the economic status of women separate from men gives retirement planning a whole new look. ReWIRE your retirement by aligning your actions and expectations with the trend toward financial independence at every age and regularly evaluate what’s important to you.

  1. Get comfortable investing. Close the knowledge gender gap and learn how to follow the markets and work closely with a financial adviser that champions your best interests.
  2. Secure a financial plan. Whatever retirement means to you, a financial plan can help get you there. A financial plan is based on your vision, values and goals for this new stage in life, and puts in play solutions and a path to help get you there.
  3. Get specific. Some advisers may talk about retirement in broad terms and offer standard solutions. Get personal with an adviser you trust in order to get to the bottom of what is important to you as a single or married woman. Dig deep into how you want to live your life and set a vision for what you want to accomplish in retirement so your retirement strategy is tailored to you as well as the needs of your family.
  4. Adjust the planning horizon. Situations change so retirement planning must too. Regularly update your planning horizon in your financial blueprint to account for changes in lifestyle, location, job, health, divorce, and the myriad of changes that impact time to retirement.  
  5. Protect your assets. One of the biggest obstacles for someone that does not have a retirement plan is running out of money later in life. This fear stems from not saving enough in the early years. Take advantage of generational and estate planning strategies to help protect what you and your family hold from unexpected issues.
  6. Safeguard documents. Keep a copy of all financial and legal documents in a safe place and accessible should the unexpected happens.
  7. Choose your financial adviser wisely. You don’t have to know it all. Choose an experienced financial fiduciary adviser who will work on your behalf to help keep your retirement plan lined up with long-term goals.

We work with our clients, their families and their children to start the retirement planning process early on. This includes educating everyone on the benefits of saving money and making wise financial choices for a comfortable retirement. It’s the right time to get started.

, Women, Wealth & Wisdom: ReWIRE your retirement planning for one

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