Women Addressing Lifetime Income More Than Men

Author: Noah Zuss

Date: 8/1/2023

View article on PLANSPONSOR

Women face specific retirement challenges compared to men and are acting to secure protected retirement income, recognizing the need to mitigate their risk of outliving retirement savings, new research shows.

More women than men are preparing for the historic demographic retirement event expected to occur in 2024—Peak 65, when the number of Americans turning 65 increases to 12,000 each day, from 10,000—and are looking to secure protected retirement income sources, according to the Alliance for Lifetime Income’s Protected Income and Planning study, Retirement Outlooks Among Peak 65 Women.

More than half (53%) of women between ages 61 and 65 do not expect that their retirement savings and income sources will last throughout their lifetime compared to 36% of men in that age group; and 61% of women in the age 61 to 65 cohort reported they are extremely interested in a financial product that guarantees lifetime income compared to 53% of men, the research shows.

Although more women ages 61 to 65 are interested in a financial product with lifetime guarantees, they are less familiar with annuities, according to the study. Men in the cohort are twice as likely (20%) to be extremely familiar with annuities as women (10%), the research shows.

“Despite deep-seated obstacles and hurdles women face in saving for retirement, women recognize annuities can give them the must-have retirement income they can count on for the peace of mind and freedom to live the retirement they want,” Jean Statler, CEO of the Alliance for Lifetime Income, states in a press release. “Today, women control a third of total household assets, estimated at more than $10 trillion. Financial professionals who ignore the unique challenges and needs their female clients face better wake up and find ways to protect their income in retirement.”

Almost half (48%) of workers ages 45 to 75 expect their retirement savings and other sources of income to last in retirement, according to a 2022 report from the Alliance for Lifetime Income.

The recent data on women’s interest in annuities is from the third chapter of the multi-part 2023 PRIP study.

The research findings suggest retirement plan advisers and plan sponsors should note the growing demand among women for annuities..

Women in the cohort show more interest in annuities:

  • 48% of Peak 65 women are extremely interested in owning an annuity that guarantees steady lifetime income compared to 37% of Peak 65 men;
  • 59% of Peak 65 women who work with a financial professional say their adviser doesn’t discuss annuities with them, or if they do, they’re unaware, compared to 44% of Peak 65 men;
  • 43% of Peak 65 women working with a financial professional who recommended an annuity bought one, compared to 20% of Peak 65 men; and
  • Among Peak 65 people married or living with a partner, 47% of women are extremely interested in owning an annuity, compared to 33% of men.

“It’s no surprise that women are more interested in annuities than men, and yet, many advisors often overlook them during retirement planning conversations,” Suzanne Norman, education fellow at the Retirement Income Institute, states in the release. “Advisors have a responsibility to present financial strategies that can best meet female clients’ unique needs and goals.”

For those who are not partnered—never married, separated, divorced or widowed—women and men have similar interest in owning an annuity (50% of non-partnered women and 48% of non-partnered Peak 65 men), the study finds.

The 2023 PRIP was conducted among 2,507 American consumers ages 45 to 75, of which 507 are an oversample of Peak 65 consumers, ages 61 to 65, for a total of 845 Peak 65 consumers. Additionally, the study includes 519 financial professionals who conduct retirement planning for individual clients.

The Alliance for Lifetime Income is a non-profit 501(c)(6) educational organization based in Washington D.C. that advocates for including protected lifetime income in retirement.

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