6 in 10 women expect a recession in 2023, complicating retirement plans

Many female investors are concerned about the economy, with fewer women feeling they have a sound strategy in place to protect against market volatility and more women saying they’re helpless against outside events compared to 2022. This according to new research from the Nationwide Advisor Authority Survey, which looks at over 500 financial advisors and nearly 800 investors.

The survey also found that 2 in 5 women say the US is currently experiencing a financial crisis, and 1 in 4 say a financial crisis will hit soon. As a result, non-retired women are trying to strengthen their financial health by avoiding unnecessary expenses this year – a strategy 31% say they will adopt – and managing their investments more conservatively – a tactic adopted by 28% of respondents.

Related: It’s ‘alarming’: Many women are delaying retirement (or don’t think they will retire at all)

However, though women seem confident there will be a recession, they don’t think the outlook will be as bad as men do. Women are more likely to say the coming recession will be short and shallow, compared to male investors who are more likely to say it will be drawn-out and dire.

“It’s important to recognize and consider the unique retirement challenges facing women,” Ann Bair, Senior Vice President of Financial Services Marketing for Nationwide, said in a press release. “We live longer and typically need to fund more years in retirement than men. Women also tend to have lower savings due to historical wage gaps and more time out of the workforce. The current economic environment has women feeling stressed about their future, but I’m encouraged to see many are taking proactive steps to seek guidance and create a plan.”

“The best way for women to take control of their financial future is to work with an advisor or financial professional to develop a long-term plan and stick to it,” added Suzanne Ricklin, Vice President of Retention and Sales for Nationwide Retirement Solutions, in the same press release. “While the current environment may make it harder to visualize long-term success, history tells us that creating a solid plan and avoiding short-sighted investing decisions in times like these is usually the most effective course of action.”

So how can advisors help guide women? The Nationwide survey suggests the annuities are a favored strategy to protect clients, used by 87% of retirement professionals.

Moreover, advisors should keep in mind how men and women approach investments differently. “Women investors tend to be more conservative in their investing strategies, potentially putting ourselves at a disadvantage when inflation spikes,” Blair commented. “Advisors and financial professionals have an opportunity to help female clients understand the amount of retirement income they can expect from current plans, and steps they may be able to take to ensure they don’t run out of money in retirement. These conversations should include opportunities to optimize Social Security benefits and plan for the impact of market volatility and health care costs in retirement.”