Women’s Retirement Optimism Takes a Hit

Concerns over Social Security coupled with larger-than-expected health care costs has dimmed the retirement dreams among a large cohort of women, according to annual survey results by the Nationwide Retirement Institute.

The June 2017 online survey of 1,012 U.S. adults ages 50 or older who are retired or plan to in the next 10 years, including 473 women, found that only 25% of women say they expect life to be better in retirement than before so – down from the previous year’s level of 31%. Even more troubling is that 26% of women believe that life in retirement will be worse for them.

Fueling these concerns is a belief that Social Security will become insolvent. Three in four women (75%) worry that the program will run out of funding during their lifetime – up from 62% last year – and more than half (58%) believe there will be cuts under the Trump administration.

“The percentage of women who believe Social Security will run out in their lifetime is the highest we have seen since we started this survey four years ago,” observes Tina Ambrozy, president of sales and distribution for Nationwide.

What’s more, women on average anticipate Social Security will pay 58% of all their expenses in retirement and 18% expect it to pay nearly all of their expenses (from 91% – 100%).

Add to these concerns the fact that nearly one in three (32%) women respondents say health problems are interfering with their retirement and 77% of those who have health problems say they occurred sooner than expected.

Compounding the problem further is that many women claim Social Security early. Nearly three in four (74%) women currently collecting Social Security took those benefits early, resulting in lower monthly payments. In addition, only 4% percent of the 290 women currently collecting Social Security out of the 473 women surveyed maximized their monthly check by waiting until age 70 to claim benefits.

And because women on average live longer than men, they spend more time in retirement and often do so with less savings, the authors note. In fact, 62% of women say Social Security will be their primary source of retirement income, according to the findings.

“The average American woman claiming Social Security benefits at 62 could spend about 75% of their monthly Social Security benefits on health care costs,” notes Ambrozy. “That’s why it’s so important to consider optimizing Social Security. Too many retirees need the money, but few are maximizing their benefit.”

Nationwide suggests that there is an opportunity for advisers to assist and that it’s essential to be knowledgeable on the topic of Social Security. According to the results, women want help with their Social Security filing options, yet only 13% of women say they receive advice on Social Security from a financial adviser.

“There are a variety of filing strategies open to women — but too few seek professional advice from a financial advisor to take advantage of them,” explains Roberta Eckert, vice president of the Nationwide Retirement Institute.

The authors further emphasize that it’s not that women don’t want the advice. The findings show that three in five women (60%) indicate that if their financial adviser could not show them how to maximize their benefit, then they would likely switch to one who could.

The 2017 Social Security Study was conducted online within the U.S. by The Harris Poll on behalf of Nationwide between May 26 and June 6, 2017.

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One Comment

  1. url url'>Martha Menard
    Posted March 26, 2018 at 11:30 am | Permalink

    Ted, women have good reason to be concerned about retirement. Not only do women still earn only .80 to the $1 due to the gender income gap, there is a wealth gap of .36 to the $1–for every $1 of wealth owned by a man, a woman typically owns only .36. Statistically, women are twice as likely to live in poverty during retirement. See my series on women’s wealth gap on Benzinga.com:

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