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The Neck That Turns the Head: A Candid Look at Women and Retirement

When we were young, they fed us, clothed us, rocked us to sleep and cleaned our dirty bottoms.  As we grew older, they bandaged our cuts and scratches from our many exploits and adventures.  They were our #1 cheerleader in the stands, even if we were standing on the sidelines.  They cooked our meals, made our beds, washed our clothes and always made sure our friends knew they were welcome with an extra plate on the dinner table.   Where would we be without Moms?

Women have been the silent CEOs of family life for many years, and they are awakening to a new reality that is forcing them to also assume the role of CFO in their household. That reality is retirement.

You’ve seen the statistics.  For more Boomers today, retirement will be a 20-to-30 year marathon, not a 5-to-7 year sprint.  The woman who sat quietly while the man of the house spent time with the financial advisor and “talked shop” is now coming to the realization she will most likely outlive her spouse by five years or more, with one in four women expecting to live to the age of 90 or longer.

A May 2014 Insured Retirement Institute study on Baby Boomers and Gen X Women revealed the extent of their worries.  70% of Boomer women and 87% of Gen X women surveyed indicated that they lacked confidence about having enough money  to live comfortably throughout their retirement years.  When asked if they were confident in their financial preparation, only 33% of Boomer women and 13% of Gen X women showed strong confidence.

Yet even with these appalling numbers, only 46% of Boomer women had yet to connect with an advisor to assist them in their planning.  Of the Gen X women surveyed, only 13% had made the effort, even though more than 75% of Boomer and Gen X women stated they planned to use a financial planner to assist them in retirement planning.

Hello?  Do you see what I see?  Opportunity!

As planners, we understand that individuals who use an advisor tend to save more money and are more likely to achieve their goals than those who go it alone.  We understand (or at least we should by now) that retirement for many of today’s Boomers is something they are unprepared to face, and many have not considered the financial implications of retirement. Still, the statistics tell us that we are failing to connect with the generation of consumers who are most in need of the services we offer.

We know that all Boomers will have to answer difficult questions regarding healthcare, Social Security, income longevity and how to mitigate the impact of inflation over a prolonged retirement.  But we need to understand that many female Boomers lack the financial sophistication to navigate the choppy waters of retirement, even though most will inherit at least twice in their lives:  once when their parents pass away and again when their spouse departs.

Advisors have traditionally focused their energy and efforts on the “man of the house.” The woman’s role has been relegated to keeping the coffee cup full and making sure the cookies are piping hot rather than being included as an active participant in the financial planning process.  As advisors, we tend to forget that the failure to cultivate that relationship with the women of the house can result in a “changing of the guard” when the husband passes away.

My mom has a saying, and she reminds me of this regularly, “Your dad may be the head of the house, but I’m the neck that turns the head.”  Dad agrees it was true when they were young, and apparently my Mom turned a lot of heads.  It was true growing up, and it’s still true today.  In addition to wearing the CEO hat, women are becoming the CFOs of their households in increasing numbers.

Saving for retirement is a universal need, but for women, it is an essential element of their desire to feel secure.  The importance of “knowing” that they won’t have to fear outliving their income and if their health diminishes along the way there will be dollars there to pay for care is of significant value to the vast majority of women clients. But in a male-dominated industry, is often overlooked or ignored.

As producers are engaging in the income-planning conversation with those who are at (or near) retirement in seminars and workshops across the country, the vast majority of questions from the audience are coming from the women in attendance.  In increasing numbers, single women are attending these events, many of whom have been divorced and now have to contend with half of their ex-spouse’s pension, 401(k) or other retirement assets, but lack confidence they are making the right decisions…and often simply don’t know what questions they need to be asking.

As advisors engage women in the planning process, it is important to understand what they’re looking for, and what they expect from a relationship with a trusted advisor.  Many need help with planning; that’s a given.  But a growing number (although still a relatively small number) have started educating themselves and are looking for someone who can validate what they are doing and provide affirmation that they’re on the right course.  They also look to this person to suggest “course corrections” as necessary, but they want to be comfortable and make the final decision.

A quick reminder: Women tend to dislike hype and high-pressure, and they are relationship-oriented so you may find you’re making multiple calls with a female client to gain her confidence and trust.  Trust can come quickly, but it is generally given over time.  And don’t forget female clients typically don’t just want to “talk shop.” They want to go beyond the professional level of the relationship to also know the advisor as a person, so you may find yourself with a longer warm-up and cool-down than usual.

Women today make up about half of the U.S. population, and the Boomer generation is no different.  In the next decade or so, we are likely to see a changing demographic as Boomers continue to age and women continue to outlive their male counterparts.   Today’s Boomer woman understands this unsettling reality and is looking for answers.   Yet this market remains overlooked and underserved.

The needs and challenges faced by Boomer women are daunting.  They’ve walked the nursing homes, cared for aging parents, and they do not want to be another forgotten statistic.  They want to live out their retirement with dignity and respect, while still giving and caring for those around them.  They want to have confidence that they can rely on a sustainable source of income that will be there as long as they are.  As advisors, we can give them that confidence.

The May 2014 IRI Boomer and Gen X women’s study concludes with a reminder that the quality of assistance we provide to these Boomer and Gen X women will determine the quality of the life they live in retirement.    They want, and need, our assistance.  They are asking for our help.

Hello?

About John Terry

John Terry
A 2008 inductee into the United States Martial Arts Hall of Fame, John is a Sales Coach with Vision Advisors, an insurance FMO, and president of High Street Asset Management, a registered investment advisory firm. He is also a Master Coach with Real Life Management. John has been helping independent producers get in front of qualified prospects for more than two decades. Author and in-demand public speaker, he has entertained and educated industry professionals, as well as their clients, through his passionate, energetic delivery of timely financial topics. John is the founder of Peace of Mind University and one of the developers of Income Planning University ONLINE--two sales programs focused on helping producers connect with and educate pre-retirees. John can be reached at Vision Advisors at 800-505-8489.

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