Money & Policy

The 4 Things Women Fear Most About Retirement

What this adviser learned and his advice to reduce concerns

(This article previously appeared on NerdWallet.com.)

I asked women, through various social media channels and also at the recent California Women’s Conference in Long Beach, Calif., 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.

The 4 Big Retirement Fears of Women

Retirement planning is a major source of anxiety for lots of women, from primary wage earners to stay-at-home moms. 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.

(MORE: Which Sex Worries More About Retirement?)

A majority of the women say they haven’t voiced this concern to their husbands or partners, saying that they don’t want to appear silly or dramatic. But since women tend to outlive their partners, there is nothing silly about it: U.S. Census data shows that about 50 percent of women age 65 or older are on their own — due to divorce, death of a spouse or having never married.

I encouraged the women I spoke with to explore this issue further, suggesting that they write down their thoughts, even if they’re painful. Writing is a powerful self-awareness exercise. I also told them to visualize and outline what gives this fear traction — financial or otherwise.

From there, they must take the leap and resolve to communicate with loved ones, significant others and a financial planning adviser who will listen, help them set goals and then hold them accountable. Without communication and conversation as first steps, financial engagement and empowerment will not spark.

2. Social Security is confusing.

All the women I talked to believe they need to begin taking Social Security retirement benefits as early as age 62, not realizing how much they’d be giving up in future benefits rather than waiting until Full Retirement Age or later. Also, Social Security spousal and survivor benefits were intimidating to many women.

Several women said they were told by their financial advisers that they should start Social Security at an early age, yet they couldn’t tell me why this was a good option.

(MORE: The Retirement Risks You Can't Predict)

Social Security is an important topic for women and their partners to discuss together, since both may be affected by the final decision. The AARP website, I think, has one of the more impressive Social Security calculators and is a start for women to get their feet wet.

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

A majority of the women shared concerns 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.

Perspective is crucial: You need to maintain a flexible mindset when designing a saving, investment and withdrawal strategy customized for future cash needs. Markets, spending habits and retirement cycles twist and turn — you know, like life.

(MORE: Retirement Planning: U.S. Women Vs. the World)

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 and are both lower in coast and easier to understand than variable annuities. 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, he or she will help you calculate how much money to direct to an annuity, especially to cover future nondiscretionary expenses such as your mortgage or rent, food and utilities.

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

What surprised me was how so many educated women lacked confidence in their abilities to embrace the investment process and how difficult it was for them to find an adviser who listened to their opinions.

Many women told me that they keep more than 50 percent of their retirement assets in cash investments, such as money market accounts. They confided that they’d rather just stick it out in cash until the “time was right” and that this way they’d avoid making “stupid” decisions and losing money.

Later, I discovered that when the “time was right” meant finding the right person or financial firm to trust.

I was shocked to hear that an overwhelming number of women had never met their spouse’s financial advisers. Four out of 10 women said that they were “being talked down to” or “not listened to” or being “sold something” by prospective financial advisers and gave up.

It’s time for women to be bolder when it comes to money. The largest wealth transfer will occur when boomers inherit from their parents and since women generally outlive men, assets ultimately will be in their hands. Women need to be more present in their own financial decisions. The wisdom and perspective they can provide to the planning process is invaluable to help bolster family finances.

The asset-management process for women begins with finding a planner, then asking tough questions. It’s time for advisers to embrace their contributions. Ask for their input, and listen.

Richard M. Rosso is a Houston, Texas-based financial adviser who helps clients achieve financial independence; build, manage, and preserve wealth and save for retirement. He is a regular contributor to MarketWatch's Retirement Weekly and Fox Television.

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