Retirement Issues for Women

We discuss investing and investor behavior here most often, but financial planning is equally important. Unfortunately, planning is a very personal undertaking so we are limited by how much information we can dispense in this format. This brief post will visit a topic that is increasingly front and center for women, retirement planning. We will give you the questions and issues you should address to help guide you in retirement. Of course, we advise you to work with a competent and credentialed planner.

Some sobering statistics1:

  • Approximately three out of five working women earn less than $40,000 per year.
  • Just 45% of working women participate in retirement plans.
  • Across all employer retirement plans, men tend to have higher average account balances and the gap gets wider with age – women over 70 have less than half the balance of men the same age.

Add to this that women tend to live longer, draw less from social security, face higher healthcare and long term care costs. Healthcare costs over a 20-year retirement could be anywhere from $250,000 to over $400,000 according to folks like the Society of Actuaries and consulting firm, Bedrock Business Results. A Greenwald and Associates survey found that women are more concerned about retirement due to these costs than men, and rightfully so.

Where to start? Hearing this information can be scary and even paralyzing for some. But knowledge works both ways and a good starting point is to gather data from reputable sources. Jumping on the internet doesn’t necessarily count as reputable. Yes, it’s a start, but a better way to conduct research is to do it on credentialed professionals who can help you. Ask for and call their references. Speak to more than one before choosing an advisor. Be conscious of sales pitches and look to someone who makes you comfortable; who doesn’t speak in industry jargon and makes everything understandable. Also follow your intuition and common sense. “If it sounds too good to be true, it is;” are words to live by. We can’t tell you how often people who need good advice come to trust “professionals” without any due diligence. Do the work!

Competent financial planners can help you build a road map so that the decisions you face as you age don’t become overwhelming. We recommend the CFP credential, Certified Financial Planner. You should also consult to view an advisor’s disciplinary history.

Our biggest fear are sales people intent on making the planning and investing process “easy”. It isn’t easy. If it were, the 80% of investors who use an advisor would all do it themselves. Now that doesn’t mean it has to be intimidating, or terrifying. Investors have a responsibility in this relationship to conduct some due diligence; to make an advisor explain things to them to their satisfaction; to speak up when they are uncomfortable or confused; to understand their investment and planning approach at a high level. Over the years, we’ve encountered far too many investors who were either unhappy with their advisor or outright taken advantage of by unscrupulous sales people. Often times there were many red flags the investor didn’t heed that would have saved them time and money.

Here are some questions to ask a prospective advisor:

  1. How long have you been an advisor? (Experience matters.)
  2. How many firms have you worked for over your career? (Too many is a red flag.)
  3. Do you have any disciplinary history I should be aware of? (See
  4. What’s your investment philosophy? (They should have a clearly defined approach.)
  5. Do you offer comprehensive planning services? (Ask for an example.)
  6. Does your firm offer access to other professionals like tax and insurance?
  7. How exactly are you compensated; how much will I pay in total? (Look for a straightforward answer. “It depends…” is a bad start.)
  8. What type of investor do you specialize in helping? (Work with an advisor that sees investors in situations similar to your own such as “women in transition”.)