Uncertain market conditions and the rising cost of living are significantly impacting women investors and their retirement plans. As they grapple with cascading economic headwinds, seven in ten (70%) women investors say that inflation and signs of a potential recession have made them rethink if and when they can retire, according to Nationwide’s ninth annual Advisor Authority survey, powered by the Nationwide Retirement Institute.

Managing expenses and monthly payments has only become more challenging as the cost of living continues to rise. More than four in ten single women (43%) and married women (40%) report that increased cost of living poses one of the biggest long-term challenges to their retirement portfolio, according to a news release.

Single Women Facing Unique Financial Challenges

As the number of single older Americans steadily grows, single women in particular are grappling with unique circumstances.

The survey found that market volatility and the rising cost of living are causing many single women investors to feel less financially secure than their married counterparts, with only 31% feeling optimistic about their financial outlook for the next 12 months, compared to 39% of married women.

Compounding this concern, more than four in ten single women (44%) are worried about their ability to afford monthly bills in retirement. Managing debt is also one of the biggest financial concerns in the next 12 months for single women (21%), with nearly one in three (31%) single women age 55 or older or retired expecting to be paying down credit card debt in retirement.

To address these challenges, single women are turning to professionals for proactive solutions. While more than one in three women (36%) currently work with an advisor, single women have begun working with them at a slightly higher rate than their married counterparts. More than four in 10 (41%) single women who work with an advisor started to do so in the past 12 months, compared to 37% of married women.

“While women in general face significant challenges when planning for retirement, single women are doing so without the balance provided by a partner’s savings and income. For many, the backup plan,” said Ann Bair, Senior Vice President of Marketing for Nationwide Financial. “It’s encouraging to see that more single women are working with an advisor – and that’s helping them feel more confident and empowered in their retirement planning journey.”

Women Want Tactical Financial Guidance

Single women tend to be more proactive than married women when it comes to discussing retirement planning with advisors advisor. Among those who work with an advisor, more single women (22%) than married women (11%) are establishing advance directives or living wills and identifying beneficiaries. Single women (27%) are slightly more likely to discuss converting accumulated savings into retirement income with their advisor than married women (22%).

Tax planning strategies (37%), accumulating sufficient savings to enter or stay in retirement (34%), and converting accumulated savings into retirement income (27%) rank among the most common topics that single women are talking with their financial professionals about.

When it comes to their partnership with an advisor, one item stands out: single and married women (19% and 25%, respectively) say the main reason they have an advisor is to feel more confident in their financial futures.

Advisors Rising to Meet Challenge

With the demand for sound advice growing in today’s inflationary market, advisors are looking to serve more women clients. Nine in ten (90%) advisors are planning to work with more women over the next 12 months, an 11-percentage point increase since August 2023. Notably, 96% of advisors feel well-equipped to do so.

However, just around half of single (47%) and married (51%) women who pay to work with an advisor or financial professional feel they understand their financial goals at this stage in their lives.

“Advisors want to build relationships with more women clients and feel very confident in their ability to serve them – and I have no doubt that most of them have the expertise to address their financial goals and challenges. However, our data shows a disconnect, with only about half of women indicating their advisor understands their financial goals,” said Suzanne Ricklin, Vice President of Sales and Retention for Nationwide Retirement Solutions. “This highlights an opportunity for advisors to take a step back and ensure they are truly listening in their interactions before offering solutions. Many women investors we surveyed appear to indicate they don’t feel heard by their advisor – and that can be a true differentiator for advisors in advancing relationships with more women clients.”

The Nationwide Retirement Institute offers a variety of resources to help financial professionals facilitate a conversation that meets women clients where they are.

Advisors Bringing Solutions to the Table

Financial advisors share women’s concerns about the current economic environment and are providing insights and recommendations to help their female clients better prepare them for retirement. Almost half (48%) of advisors say the rising cost of living has influenced clients to rethink or redefine retirement planning strategies, followed by inflation (45%).

When it comes to retirement solutions, nearly eight in ten (79%) advisors who have a strategy to protect client assets against market risks are employing annuities to help them address this challenge, followed by diversification and non-correlated assets (77%) and liquid alternatives, such as mutual funds or ETFs (58%).

Nationwide’s ninth annual Advisor Authority study powered by the Nationwide Retirement Institute explores critical issues confronting advisors, financial professionals, and individual investors—and the innovative techniques that they need to succeed in today’s complex market.

About Advisor Authority: Methodology

The research was conducted online within the U.S. by The Harris Poll on behalf of Nationwide from January 8-23, 2024, among 518 advisors and financial professionals and 2,346 investors ages 18+ with investable assets (IA) of $10K+. Investors included a subset of 391 “pre-retirees” aged 55-65 who are not retired and subsets of 346 single women and 726 married women.

Weighting: Raw data from advisors were not weighted and are therefore only representative of the individuals who completed the survey.  Investor data are weighted where necessary by education, age by gender, race/ethnicity, region, marital status, household size, employment, household income, investable assets, and propensity to be online to bring them in line with their actual proportions in the population.  To ensure the investor sample was representative, the data were initially weighted separately for those with investable assets of $10K to less than $100K and those with $100K+ and then post-weighted/combined into a total investor group. Data for the subset of retirees aged 55-65 who are not retired were weighted separately as needed by education, age by gender, race/ethnicity, region, marital status, household size, employment, household income, investable assets, and propensity to be online.

Respondents for this survey were selected from among those who have agreed to participate in our surveys.   The sampling precision of Harris online polls is measured by using a Bayesian credible interval.  For this study, the sample data is accurate to within + 2.8 percentage points using a 95% confidence level.  This credible interval will be wider among subsets of the surveyed population of interest. The sample data for the subset of those aged 55-65 who are not retired is accurate to within + 6.2 percentage points using a 95% confidence level.

All sample surveys and polls, whether or not they use probability sampling, are subject to other multiple sources of error which are most often not possible to quantify or estimate, including, but not limited to coverage error, error associated with nonresponse, error associated with question-wording and response options, and post-survey weighting and adjustments.

Source: Nationwide