How I’m Talking to Clients About Retirement Planning for Single Women

According to a recent report from Wells Fargo Economics, 52% of women in the United States are single. While single women are becoming increasingly important to the workforce, the pay gap between single men and single women persists. Women also have a longer lifespan, which, combined with a lower income, can impact their ability to save for retirement.

As an advisor who works with many single women—and as a single woman myself—I know it is increasingly important to consider retirement planning for singles differently.

Key Takeaways

• Retirement planning for a single woman comes with challenges and requires a multifaceted approach.
• Factors like the gender pay gap, the growing potential to be breadwinners, longer life spans, and competing priorities can impact a woman’s ability to reach retirement goals.
• Combining the quantitative and qualitative aspects of retirement planning is critical to retiring successfully.

When planning for retirement, particularly for single women, start by identifying goals and a long-term vision for your client’s life. Key questions include:

• Do you have children, or do you want to plan for children in the future? 
• Do you have any future obligations that could affect your retirement plan, such as caring for aging parents or a sibling with special needs?

• Do you desire to support other family members, such as contributing to college expenses for nieces, nephews, or godchildren? 
• Does philanthropy and charitable giving play a role in your life? How do you want to incorporate this into your finances now and in the future? 
• Do you currently have (or have a family history of) any chronic illnesses that would affect your need for additional healthcare or long-term care? 

Note

Research shows that women are more often the primary caregivers for their parents.

These critical factors help determine how much will be needed for retirement, how much flexibility we should build into their plan, and what other tools we can incorporate to fill the gaps. 

What I’m Telling My Clients

Approximately half of my clients are single women. I want to help them be prepared to cover their retirement on their own, even if marriage is a future possibility. When thinking about retirement planning, as a single person or potential breadwinner, I offer several pieces of advice:

1. Focus on Increasing Your Income

The gender pay gap has persisted for decades and significantly impacts a woman’s ability to build wealth. I encourage women to negotiate and strive for competitive salaries.

2. Live within Your Means

When you’re single, you bear all of the financial responsibility for your household, and your ability to save can be limited. Managing your cash flow wisely, keeping debt to a minimum, and living within your means are essential to building wealth. 

3. Explore Life, Disability, and Long-Term Care Insurance

If clients have financial obligations—or anticipate them in the future—I recommend getting term life insurance while they’re young and healthy. We also discuss the potential need for long-term care insurance and the importance of disability insurance.

4. Find Balance

When it comes to money, we all juggle competing priorities. Single parents, for instance, may find it hard to balance saving for college and saving for retirement while also taking recreational time off. Incorporating savings strategies for clients to enjoy hobbies, vacations, and other interests help them enjoy the present and can improve their quality of life. 

5. Build a Community Around You

Women who are single and have no children should focus on building community. Strong relationships (both romantic and non-romantic) and regular social activity have been shown to increase happiness and longevity.

The Bottom Line

Retirement planning for single women presents unique challenges, including the gender pay gap and longer life spans. By asking the right questions and considering critical factors, advisors can better prepare our clients for their retirement and long-term goals.

Read the original article on Investopedia.