With a possible recession looming, 40% of women investors feel the U.S. economy is already in a financial crisis, with another 24% convinced that the country is on the brink of a downturn. With all that in mind, it’s no wonder that 27% of those women say they feel unprepared for retirement. But there’s some good news, too, and it demonstrates a good strategy for dealing with retirement anxiety: 40% of women who work with a financial professional say that they feel “very prepared for retirement.”
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LIMRA, a financial services trade group, surveyed Americans ages 40 to 85 with at least $100,000 in household investable assets.
“LIMRA research has revealed that working with a financial professional increases the likelihood that consumers will complete retirement planning activities,” the organization said in an announcement. “This most recent study shows women who work with a financial professional are more likely to have completed key retirement planning activities.”
Another finding from the research is that women working with a financial professional are more than twice as likely to have a formal written retirement plan as women without an adviser, by a ratio of 25% to 10%. Earlier industry research has shown that maintaining a written plan — one that includes specific goals, asset management and risk mitigation strategies — leads to higher confidence levels among women investors.
Women’s Financial Fear Factor
Women have displayed less confidence about investing and money for many years, as several studies have borne out. Surprisingly, it’s the less confident women investors who often have more successful results than overconfident male investors.
Nonetheless, Nationwide’s Nationwide Retirement Institute reported in March that, “an increasingly large percentage feel that there is no way to properly prepare for a recession, with nearly nine in 10 (87%) women saying they can do all the right things to manage their finances but still be blindsided by outside events,” which is a significant increase from the following year.
As a result, 31% of women in the Nationwide study who aren’t retired said they’ll be cutting back on spending during the next year so that they can save more money for their retirement. In addition, 28% said they’ll make more conservative investment choices at the same time.
Whether working with a financial professional or not, a formal written retirement plan, according to LIMRA, should involve a comprehensive discussion about life and retirement goals, approaches to asset management and options for risk mitigation.
Bottom line
A report about women and investing from FINRA conducted during 2021 and just recently released in March revealed that 59% of women reported feeling anxious about their finances, compared with 52% of men, yet only 33% of women have tried to estimate how much money they need for retirement, compared with 44% of men.
Tips on Financial Planning for Women
- One way to start investing and preparing for retirement is to work with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Planning for retirement can be made easier with various online tools. Check out SmartAsset’s retirement calculator to learn more.
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