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The Four Things Women Fear Most in Retirement

June 11, 2014
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By  Richard M. Rosso

Learn more about Richard on NerdWallet’s Ask an Advisor

I asked women, through various social media channels and also those at the California Women’s Conference last month in Long Beach, California, about what keeps them awake at night about retirement.

The responses were overwhelming, and I lost count after 20, sleep-depriving confessions. I was overcome by their concerns, which were enough to make me toss and turn, too.

Retirement planning is a major source of anxiety for lots of women, from primary wage earners to stay-at-home moms, with the overarching concerns of reducing stress and increasing security when it comes to exploring, funding and living through retirement. Here are their top four concerns:

1. I will be left alone.

Most women are convinced that they will be living at least the last decade of retirement alone as their spouses pass away, and their children are occupied with their own lives. The thought of handling financial obstacles alone, especially around long-term care expenses, is a source of angst. Women fear being a burden to their families, becoming isolated and facing alone the overwhelming vulnerabilities that come with aging.

A majority of the women say they haven’t voiced this sentiment in their current financial relationships. Surprisingly, a few are reluctant to discuss this issue with spouses or partners, saying that they don’t want to appear silly or dramatic.

Since women tend to outlive their partners, there is nothing silly about this point: U.S. census data shows that about 50% of women age 65 or older are on their own — through divorce, death of a spouse or those who never married.

I encouraged them to explore this issue further. I suggested that they write their thoughts down on paper even if they’re painful. Writing is a powerful self-awareness exercise.

I told them to visualize and outline what gives this fear traction — financial or otherwise. Everything goes. No judgment. Nothing is off limits. Whatever is contributing to this concern should be documented.

From there, they must take the leap and resolve to communicate with loved ones, significant others and a financial planning advisor who will listen, and then help them set personalized goals based on strategies and then hold them accountable.

Financial professionals may be effective at facilitating discussions that can help women feel more confident as long as they’re empathetic and receptive to being in the middle as nonjudgmental sounding boards.

Without communication and conversation as first steps, financial engagement and empowerment will not spark.

2. Social Security is confusing.

All of the women I talked to believe they need to take retirement benefits as early as age 62, not realizing what they are giving up in future benefits if they wait until full retirement age or later. Also, spousal, survivor benefits and tax worries were intimidating to many women.

There needs to be a serious, ongoing discussion with women about maximizing Social Security. Several women said they were told by their financial advisors that they should start Social Security at an early age, yet they couldn’t tell me why this was a good option.

Social Security is an important topic for women and their partners to discuss together as both may be affected by the final decision.

One of the more impressive Social Security calculators is available at This easy-to-use method is a start to get your feet wet. From there, I would seek a financial professional not afraid to tackle this issue, and who has a passion to get to the best bottom-line benefits for your situation. Many financial advisors are learning more about Social Security or will use technology to help you get the most out of your benefits.

3. I’m afraid I’ll outlive my savings and investments.

A majority of the women shared how concerned they are about longevity. Many had parents who were thriving at age 80 and beyond. Since women tend to be conservative investors, their concern over outliving retirement assets is valid.

Frankly, the financial profession is inundated with studies and theories about the appropriate asset allocations for retirement and the withdrawal rates required to ensure that investments, adjusted for inflation, last as long as you do.

Perspective is crucial: You need to maintain a flexible mind-set when designing a saving, investment and withdrawal strategy customized for future cash needs. Sure, it’s part science. However, markets, spending habits and retirement cycles twist and turn — you know, like life.

And don’t rule out annuities, which can generate income for you or you and a spouse 10 years or later down the road. Deferred-income annuities help bring longevity protection to retirement planning. They’re lower in cost and easier to understand when compared with variable annuities.

Variable annuities are too variable. With deferred-income annuities, you know the exact dollar amount of the benefits you’ll receive. If you partner with a licensed insurance specialist or planner, they will help you calculate how much money to direct to an annuity, especially to cover future nondiscretionary expenses like mortgage, rent, food and utilities.

4. I’m not confident about my investment decisions.

Cash appears to be as comforting as a Snuggie for women. Many women, regardless of age, maintain greater than 50% of their retirement assets in cash investments like money market accounts, which isn’t efficient, however, their logic appears sound.

As opposed to doing it themselves or creating a collection of stocks and mutual funds without understanding the risks, many women confided to me how they would rather just stick it out in cash until the “time was right.” They said they figured that at least “stupid” decisions and lost capital will be avoided.

Frankly, I thought it was a good enough reason to remain in cash. Why invest without a buy-sell strategy and a complete understanding of how investments work together from a risk-return perspective?

What surprised me was how educated women lacked confidence in their abilities to embrace the investment process and how difficult it was for them to find an advisor who listened to their opinions. Five women confided that they were too busy juggling career and family to find an advisor.

Later, I discovered that when the “time was right” meant finding the right person or financial firm to trust. All sought a jointly agreed-upon investment process along with a strategy to implement and monitor. Many said they were doing homework by asking friends and family.

Four out of 10 said that they were “being talked down to” or “not listened to” or were being “sold something” by prospective financial partners and gave up. How disappointing it was to hear this.

I was shocked to hear that an overwhelming number of women had never met their spouse’s financial advisors. They also mentioned investment accounts that weren’t examined by both partners. Husbands did their financial thing, and they did theirs.

It’s time for women to be bolder when it comes to money. The largest wealth transfer will occur when baby boomers inherit from their parents, and since women generally outlive men, assets ultimately will be in their hands.

The asset-management process for women begins with finding a planner, then asking tough questions.

Women need to be more present in their own financial decisions. It goes way beyond bank statements. It always has. The wisdom and perspective women can provide to the planning process is invaluable to help bolster family finances. It’s time to embrace their contributions. Ask for their input, and listen.

More importantly, women need to speak up and understand what they bring to the retirement planning and investment process.