Retirement needs are a concern across the gender spectrum for working-age individuals, but with different age expectancies and different pay scales, female clients can have a vastly different retirement income outlook than their male counterparts.
The average life expectancy for women in the U.S. is 81, with many living on into their 90s, but for men, it is 76. Because women live longer on average and they continue to be paid less for the same jobs, their income stream and retirement needs will be vastly different from their male peers.
Women “need to stretch their retirement income further,” said Jean Statler, CEO of the Alliance for Lifetime Income, in an interview with Her Money. “It magnifies the risk and possibility of running out of money.”
For those individuals still in their 40s or below, the focus should primarily be on saving for retirement as soon as possible. Those in their 50s should be reevaluating their retirement income needs and realigning to better reach those goals.
“My advice in your 20s, 30s, and 40s is getting to a 10% to 15% savings rate. If you’re doing that, then check back in when you are in your 50s,” said Anne Lester, a retirement expert and former head of retirement solutions for the asset management portion of J.P. Morgan.
Financial advisors can help individual clients calculate their retirement income needs based on their current income stream and any retirement savings plans and investments. How a retirement portfolio is positioned will depend largely on the needs of each client and also how close they are to retirement age.
Those that are near or in retirement would likely be in a portfolio preservation phase, though changing market conditions could impact how that portfolio is positioned. Individuals with a longer time horizon can afford to have a higher risk profile.
“There are so many different investment options, it’s not simply black and white,” said Chelsea Lobato, vice president and branch manager at Charles Schwab.
Financial advisors play a crucial role in helping their clients reach their retirement goals and being aware of the particular challenges that female clients face from both a longer retirement time horizon and generally reduced income stream while working will help advisors to best position their clients’ portfolios, and set realistic retirement goals.
Nationwide offers a suite of actively managed ETFs within equities for financial advisors. These funds include the Nationwide Nasdaq-100 Risk-Managed Income ETF (NUSI), the Nationwide S&P 500 Risk-Managed Income ETF (NSPI), the Nationwide Dow Jones Risk-Managed Income ETF (NDJI), and the Nationwide Russell 2000 Risk-Managed Income ETF (NTKI).
For more news, information, and strategy, visit the Retirement Income Channel.
