IMPACT OF RETIREMENT RISKS ON WOMEN. Report: Society of Actuaries & WISER Presented by: Linda Stone, WISER Senior Fellow

Transcription

1 IMPACT OF RETIREMENT RISKS ON WOMEN Report: Society of Actuaries & WISER Presented by: Linda Stone, WISER Senior Fellow

2 SOA RESEARCH 2013 Survey on Process of Retirement and Retirement Risks Covers retirees and pre-retirees Focus on how people decide to retire, risk management, differences between men and women Series of focus groups Resource constrained retirees who retired voluntarily Separate focus groups for men and women Survey of Recent Widows Women under age 70 who were widowed within the past 5 years 2

3 SPECIAL ISSUES FOR WOMEN Longer life expectancy: At age 65, 3 out of 10 women will live to age 90 Married couples need to plan for survivor s needs Women earn less than men annually and over a lifetime Women are the primary family caregiver resulting in shorter work histories by an average of 12 years Women have lower employer- provided retirement benefits and lower Social Security benefits Women s median retirement income is 58% of 3

4 SPECIAL ISSUES FOR WOMEN Retirement Risks: Outliving Assets Loss of Spouse Decline in Functional Status Health Care and Medical Expenses Inflation Lower Lifetime Earnings and Wealth 4

5 PROCESS OF RETIRING Major new insights into drivers of voluntary retirement More from than to Often problem/health/family needs driven Pre-retirees continue to say that they will retire at a later age than the age that retirees actually did retire (age 65 vs age 58 in reality) Many pre-retirees make retirement decisions with little discussion or consultation with 5

6 SHORT PLANNING HORIZON Decision to retire made by considering current ability to pay bills: Little or no consideration given to long-term impact of inflation or to impact of unpredictable expenses Little consideration of Social Security claiming strategies Little interest/ability to assess risks Focus group participants were adaptive and mindful of need to change expenditures to match income Viewpoint is anything can happen so adjust as you go 6

7 DIFFERENCES BY GENDER Before retirement, women are more likely than men to expect they will miss having a regular paycheck and other aspects of the job to be concerned about maintaining their standard of living in retirement to be concerned about health costs and mental incapacity to think about the impact of their decision on their children 7

8 DIFFERENCES BY GENDER After retirement, women are more likely than men to say that their spouse s retirement and caregiving responsibilities prompted them to retire to spend time caring for others during their retirement to underestimate their life expectancy to be concerned about their financial security to be concerned about long term care to be realistic To have planned for changes in their mental and physical abilities 8

9 IMPACT OF WIDOWHOOD Widows are of a generation less likely to be involved in family finances 61% of widows not involved in family finances had trouble filing income taxes 26% needed to move to less expensive housing when spouse died Half of all widows lost at least 50% of their income when their husbands died 37% had difficulty determining benefits from Social Security 9

10 CONCLUSIONS Voluntary retirement often a push with women often pushed by family concerns Caregiving impacts wages, benefits and retirement income Pre-retirement plans don t happen pre-retirees expect to work 7 years longer than retirees actually did pre-retirees intend to do more financial planning than retirees do married women may retire earlier due to spouse s benefits Gaps in knowledge and retirement preparation persist 10

11 FULL REPORT AVAILABLE AT: