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The future is female: Focus on women’s retirement challenges to improve your business’s success

March 23, 2022
female retirees chatting on a couch

Women have unique retirement planning needs. They also contend with tremendous uncertainty as they prepare for the future. In addition, women’s roles with work, families and finances are becoming increasingly complex. Women of all generations are taking a proactive role in making decisions about their finances and preparing for retirement. That includes not only planning, saving and investing, but also managing the stress that goes along with it.

It stands to reason that women need financial guidance now more than ever—not only the steps to take, but the knowledge to make informed decisions. Women want a financial professional who will take the time to understand their unique situation and challenges, and help them prepare for a variety of scenarios so they can feel more confident in their futures. Financial professionals have an enormous opportunity to build relationships with female clients and help them proactively address gaps in their retirement plan while focusing on their long-term goals.

Why women? Why now?

Women are more in control of their finances than ever before, and they are the biggest drivers of wealth. Women control nearly $11 trillion in U.S. total household assets and are expected to manage close to $30 trillion by 2030 as wealth transfers from older generations, a potential amount that rivals America’s GDP.1

In addition, women are well-educated and pursuing higher-earning careers or running their own businesses. They are also marrying later in life, which gives them time to build solid financial habits and wealth for the future on their own. When they do start a family, women often take on the role of financial decision-maker and manager. These are relatively new roles for the modern woman; it’s likely her mother or grandmother had more traditional roles that didn’t include worrying about financial planning. As such, financial professionals have an opportunity to act as a guide for female clients as they navigate uncharted territory.

Finally, female clients can positively impact your practice. Happy clients are more likely to generate referrals; 70% of women are likely to recommend their financial professional to a friend or relative.2 Cultivating strong relationships with female clients is vital, regardless of their marital status; 70% of widows switch financial professionals within one year of their husband’s passing.3

Retirement planning challenges facing female clients

Women have additional financial concerns as a result of the COVID-19 pandemic. Many women have found themselves worrying more about financial losses and protecting assets. It’s no wonder—these factors play a critical role in wealth building and retirement security. That’s not to say women investors are in general averse to risk. For the most part, they are risk aware.

Around half of women (49%) are currently saving for retirement in a 401(k) or other retirement account like an IRA.4 But they’d rather not do it alone, however. When women seek guidance from financial professionals, they do so to feel more confident about their financial futures.5

Uncertainty makes planning for the future, and for retirement, difficult for everyone, especially women. They face a multitude of unique challenges to retirement planning, including:

Longer life expectancies: Women typically live longer, leading to lengthier retirements and greater expenses.

Caregiving responsibilities: Women’s families depend on them for care that often spans generations, causing lasting financial effects such as lower earnings potential and lower standards of living in retirement.

  • Long-term care: Many women have not considered who will care for them as they age, or how they will pay for that care.
  • Earnings gaps impact Social Security: On average, women earn 82 cents for every dollar a man earns, which often translates to reduced Social Security benefits in retirement.6 Women tend to rely on Social Security more than men7 and their benefits may be less.
  • Health care costs: 75% of women say out-of-control healthcare costs is their biggest fear in retirement.8 Considering that out-of-pocket costs can soar to $270,000-$325,000 for a 65-year-old retired couple, it’s not surprising that women tend to worry about the impact of health care on their retirement income.9

Managing uncertainty in retirement, planning for healthcare costs and creating a guaranteed income stream are common themes women bring up when preparing for retirement. Financial professionals can help by meeting women where they are in their financial journey, listening to their concerns and creating a safe, judgement-free space for them to ask questions.

How to connect with female clients

To earn women’s trust and business, financial professionals should:

  • Treat female clients as individuals, not a niche or category.
  • Get to know who they are as people and what’s important to their financial futures.
  • Listen and ask questions. Avoid jargon. Don’t assume you know what she needs.
  • Create a safe, judgement-free zone where she feels comfortable to learn and ask questions.
  • Lead with empathy to build trust. Become a trusted partner in her financial planning journey.
  • Engage them in the conversation and demonstrate that you understand their needs, values, and goals.

Tactics like these are invaluable in cultivating and creating long-lasting relationships with female clients.

What’s more, developing a base of female clients is important to the success and longevity of your practice. As this influential demographic continues to accumulate and control more of the country’s wealth, they are going to need help solving their retirement planning challenges. You can help them achieve their goals and feel more confident about their futures.

Sources and Disclaimers

  • 1

    McKinsey & Company, “Women as the next wave of growth in US wealth management,” July 2020.

  • 2

    Seeing the Unseen, The role gender plays in wealth management, Bank of America Corporation, 2021

  • 3

    McKinsey, ibid.

  • 4

    Nationwide Social Security survey conducted by The Harris Poll, April 19-May 7, 2021

  • 5

    Nationwide Retirement Institute 2020 Advisor Authority survey.

  • 6

    US Department of Labor Blog; Janelle Jones, Chief Economist, US Department of Labor, March 19, 2021

  • 7

    Nationwide Retirement Institute 2021 Consumer Social Security survey.

  • 8

    Nationwide Retirement Institute Health Care Consumer Survey, conducted by The Harris Poll on behalf of the Nationwide Retirement Institute between May 7-16, 2020 among 1,940 adults age 24 and older, including 1,026 women.

  • 9

    “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries Need for Health Expenses Decrease in 2020,” Paul Fronstin and Jack VanDerhei, EBRI (May 28, 2020).

  • Except where otherwise indicated, the views and opinions expressed are those of Nationwide as of the date noted, are subject to change at any time and may not come to pass.

    NFM-1294AO (3/22)

NFN-1294AO