Panel: American Women Face Unique Challenges When Planning for Retirement

By Ray Harmon • October 28, 2015 • 0 Comments
A recent panel discussion the Indexed Annuity Leadership Council (IALC) held in Washington, D.C. titled, “The State of American Retirement: Navigating the Gender Imbalance,” made a strong case for more attention being paid to better enabling women to engage in financial planning.

Cindy Levering of the Society of Actuaries emphasized that women shouldn’t “plan to averages” and should instead look at their own individual risk tolerances and expected lifespans, but the story that the statistics tell is one that shouldn’t be ignored either. American women tend to live somewhat longer than men and their financial planning needs to account for that. Yet, according to the panel, 60% of women aged 65 or older cannot afford to cover their basic needs. Meanwhile 43% of women currently in the workforce expect to work beyond age 70 or never retire at all. Women are still paid less than their male counterparts and are out of the workforce an average of 13 years to tend to their families, so they spend more than a decade not earning or saving additional money for retirement.

Senior Vice President of Leading Age Dr. Cheryl Phillips, M.D., noted that women who are late-life caregivers to their spouses and families often neglect their own health and, on the lower end of the socioeconomic spectrum, they may face problems like food scarcity and social disengagement which are both likely to affect their health care costs. These factors, in turn, may deplete what little resources these women have accumulated and impede their knowledge of what help is available in their communities, respectively. Dr. Phillips suggested family conversations like advanced care directives and planning for lifetime income can never come too early.

For younger women, the panel asserted a need to balance paying for college with saving for retirement. “There are no loans and scholarships for retirement,” stated Kathy Stokes, senior fellow of the Women’s Institute for a Secure Retirement (WISER), “so have the hard talk with your daughters.” Stokes emphasized starting financial literacy at home when girls are still young. When they enter the job market, focus on saving 10-15% through workplace retirement plans and getting the full employer match to not leave employer money on the table.

When asked by an audience member what retirement plan providers can do to make a business case for a focus on women’s retirement issues, Susan Jennings, executive committee member of the IALC, stressed that more and more focus needs to be placed on these issues. “Don’t be afraid. These issues may not be in your comfort zone but it’s your life,” she said, encouraging women to do their due diligence and find the right professionals for their planning needs.

Ray Harmon is ASPPA's Government Affairs Counsel.