Women’s life expectancy in particular, and the fact that women outlive men by five years in general, presents advisors with a huge planning opportunity, Eckert said.
“Simply put we’re going to live longer than our male counterparts. If we earn less and live longer, it contributes to a bigger retirement gap,” she noted.
Women who turned 65 this past April have a life expectancy of 86.7 years
“We find that some 50% of women underestimated how long they’ll live by five years,” Eckert said.
Longevity along with earnings and retirement gaps will lead to higher health care expenses, which make the services that advisors offer that much more critical to women who want to optimize their retirement success, she added.
That’s highlighted in the area of Social Security and healthcare planning and the need for calculate customized cost projections and illustrations to show women the financial choices they make and the dramatic impact it can have on their retirement.
For an average 65-year old who started receiving Social Security payments at age 65, healthcare expenses will consume some 68% of their benefits, she added.
Only 6% of women could identify the factors that determine Social Security benefits, said Eckert, who said that a tool that Nationwide developed--the Social Security 360 Analyzer--can help advisors and their clients clearly see and evaluate all the variables and choices available to them.
Meanwhile, for an average 65-year old who started receiving Social Security payments at age 65, healthcare expenses will consume some 68% of their benefits, she added.
Some 75% of women list health care costs going out of control as a top fear in retirement. It’s a well-founded concern. Out of pocket costs for a 65-year old couple could reach between $270,000 to $325,000. That’s a huge opening for advisors to
“We did a presentation recently for a woman who was deciding whether to retire in Denver or Southern California, and we showed her there was a $60,000 health care cost differential” in her choice, Eckert said.
“Some 84% of people underestimate what healthcare will cost. In addition, 76% of women we surveyed said they wished they understood Medicare better. This creates a perfect storm to insert yourself,” Eckert said.
It can also be invaluable for advisors to arm women clients going through divorce with projections about how much their healthcare will cost in retirement, possibly adding a quarter of a million of dollars or more to a divorce package, she added.