What are the typical financial and non-financial needs of women preparing for retirement? How might those needs change over time and impact the retirement plan? Which specialists should insurance and financial service professionals be partnering with to best serve women entering retirement?
These and other questions received a full airing on the opening day of the Retirement Income Industry Association’s 2015 RIIA Annual Conference. Being held at the Hyatt Regency in Indianapolis, Sept. 16-18, the gathering brought together three experts to explore the retirement planning challenges of women.
For advisors, an understanding of the topic is increasingly critical, and not only because women account for a growing proportion of breadwinners and keepers of the household checkbook. Because they tend to outlive men, women past a certain age in retirement often interface with a financial professional on their own.
For the advisor, that means being better attuned to the broader concerns of women — such as ensuring a client’s or family’s well-being in retirement — than those commonly aired by men, who tend to be more analytical and focused on portfolio performance.
But Marcia Mantell, president of Mantell Retirement Consulting, cautioned that advisors should not think of older women as a single demographic block, for their retirement issues vary widely. Some are single and living with adult children; others are widowed with a spousal inheritance to tie them over.
Still others are divorcees without a significant financial cushion. They may also be recent retirees thinking about reentering the workforce to make ends meet or women planning on an early retirement to care for a parent in ill health.
Also to weigh: whether the female client is part of a non-traditional family, such as a same-sex couple or blended family with adult children by first and second marriages. The myriad of relationships in such unconventional households can, the panelists noted, significantly complicate retirement estate and wealth transfer planning.
To boot, the financial needs of female clients can change over time due to the evolving roles of household members or unanticipated life events, such as a the disability or illness of a family member that can upend retirement objectives. For example, wanting to engage in physically strenuous recreational activities.
The 40- or 50-year-old client planning to, say, do a lot of rock-climbing might opt to retire sooner rather than later while she’s still able to scale mountain peaks. This decision, of course, has to factor in income lost by leaving the workforce early.
“Retirement plans have to be tailored and, as necessary, revised for each client because family relationships, financial circumstances, retirement goals and the client’s physical and mental health can change over time,” said Anna Rappaport, president of Anna Rappaport Consulting. “This point is really key.”