7 in 10 women are rethinking retirement: How financial pros can meet the challenge

Women investors are re-considering their investment strategies, in part due to inflation and market uncertainty, a new report has found.

Nationwide’s ninth annual Advisor Authority survey, released by the Nationwide Retirement Institute, found that 70% of women investors say inflation and signs of a potential recession have made them rethink if and when they can retire.

Part of the report’s focus is on single women, who the report said face unique financial challenges. With recent market volatility and higher costs of living, single women investors have more worries about retirement, the study found. For single women, only three in 10 (31%) said they felt optimistic about their financial outlook for the next 12 months, compared to 39% of married women. In addition, 44% of single women investors say they are worried about their ability to afford monthly bills in retirement.

“While women in general face significant challenges when planning for retirement, single women are doing so without the balance provided by a partner’s savings and income. For many, there is no back-up plan,” said Ann Bair, senior vice president of marketing for Nationwide Financial. “It’s encouraging to see that more single women are working with an advisor – and that’s helping them feel more confident and empowered in their retirement planning journey.”

Seeking more resources, advice

The study found that in this dynamic, single women investors are looking for more advice on retirement savings. Currently, 36% of women overall work with an advisor. The researchers say their survey suggests that single women have begun working with advisors at a slightly higher rate than married women.

“More than four in 10 (41%) single women who work with an advisor started to do so in the past 12 months, compared to 37% of married women,” the report said.

But more work needs to be done, according to Bair. The study found that while a majority of financial advisors (96%) said they felt adequately equipped to serve female clients, just 47% of single women and 51% of married women felt their advisor understands their financial goals. To better serve this market, advisors should ensure they are truly listening in their interactions with women clients before offering solutions, the study said.

“Our data shows a disconnect, with only about half of women indicating their advisor understands their financial goals,” said Suzanne Ricklin, vice president of sales and retention for Nationwide Retirement Solutions. “This highlights an opportunity for advisors to take a step back and ensure they are truly listening in their interactions before offering solutions. Many women investors we surveyed appear to indicate they don’t feel heard by their advisor – and that can be a true differentiator for advisors in advancing relationships with more women clients.”

Looking for a financial partner

Bair said that her company had asked women want they want from financial advisors in other surveys, and found they are looking for a partner in their efforts to plan their financial future. “Women want more financial guidance,” she said. “Not just about the steps we need to take, but the different scenarios we might face and the knowledge we need to make informed decisions. The industry hasn’t always focused on our unique needs and concerns—and this may be driving a disconnect between women and advisors. It’s important for advisors to meet their female clients where they are.”

The Advisor Authority survey noted the areas where women had the most interests in guidance from professionals:

• tax planning strategies (37%)
• building sufficient retirement savings (34%), and
• converting accumulated savings into retirement (27%).

For their part, retirement advisors said they were tuned into the more recent feedback from women investors. “Almost half (48%) of advisors say the rising cost of living has influenced clients to rethink or redefine retirement planning strategies, followed by inflation (45%),” the study found.

Related: Setting women up for retirement success: Employers need to bridge that savings gap

Still there are opportunities for improvement, the Nationwide researchers said. Bair said the high number of women investors who say they have reconsidered their strategies due to economic trends indicated a need for retirement strategies to address those concerns.

“Advisors should be thinking about strategies to help their clients protect their assets against market risk, like annuities,” she said. “For single women clients in particular, focusing on their unique investment needs, like planning for long-term financial independence and building a robust emergency fund can help them feel more confident. With women set to inherit trillions of dollars in the impending wealth transfer, advisors can’t afford to miss out on connecting with them.”