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Helping women achieve a more secure retirement

AUG. 23, 2018

Unique challenges for women in retirement

Women, whether they are married, single or widowed, typically rely on Social Security benefits for a significant portion of their retirement income. In fact, a recent consumer survey found that women expect Social Security to cover 58% of their expenses in retirement. With Social Security as a foundation of most retirees’ retirement income plans, it’s important to consider the unique challenges women face when you help them make informed decisions about how and when to file. Keep the following points in mind when helping female clients maximize their benefits.

Longevity makes retirement more challenging for women

A key consideration in retirement planning for women is longevity. Since women live an average of six to eight years longer than men², if a man and woman retire at the same time, the woman will need her savings to cover more years of retirement. Her longer life also leads to a greater likelihood of incurring increased healthcare costs and potential long-term care costs, requiring that her savings stretch even further.

Women often balance earning income with caregiving

Women often leave the workforce (permanently or temporarily) to raise children or provide care for elderly parents or their spouse. This results in interrupting or pausing their peak earning years. Because of this, women tend to have more years of no or low income during their careers—this not only leads to less savings, but also reduces their Social Security benefits. 3 in 4 women collect social security benefits early³.

Many women aren’t receiving the support they need

Despite these considerations, many women don’t have a formal plan and aren’t incorporating strategies to help maximize their benefits. Only 13% of women say they received advice on Social Security from a financial advisor¹. However, advisors do play an important role in helping women plan – 86% of women who work with an advisor say their Social Security benefit is as expected or more than expected.¹

Key considerations to discuss with female clients

  • Delaying Social Security could increase annual benefits by as much as 76%⁴
  • Working one additional year could raise a woman’s monthly Social Security benefit by 8.6%⁵
  • Understanding all the options provided under spousal and survivor benefits can mean a substantial increase in retirement income

Advisors are in an excellent position to help women make educated decisions on when and how to file for Social Security benefits and how these decisions fit into their overall retirement income picture. Start the conversation today with your female clients about making one of the most important decisions of their lifetimes.

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Sources

  • 1

    Social Security Consumer Survey conducted by Harris Poll on behalf of The Nationwide Retirement Institute, 2018

  • 2

    Female life expectancy, World Health Organization, 2019

  • 3

    Nationwide 2017 Social Security Consumer Survey. The survey was conducted online within the U.S. by The Harris Poll on behalf of The Nationwide Retirement Institute between May 26 and June 6, 2017, among 1,012 U.S. adults ages 50 or older who are retired or plan to retire in the next 10 years, including 473 women.

  • 4

    Based on an individual with full retirement age of 66, comparing early filing at age 62 and receiving reduced benefits of 75% of primary insurance amount versus delayed filing at age 70 and receiving credits to increase benefits by 32% of primary insurance amount.

  • 5

    Center for Retirement Research at Boston College, “Do late-career wages boost Social Security more for women than men?”, Matthew S. Rutledge and John E. Lindner, November 2016.

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