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he number of single women retiring is increasing every day. Divorce, delayed marriage, death of a spouse, or merely the desire to remain single are all causing this demographic to grow. All these prospects will need your help to optimize their retirement plan, so are you ready to inform that widow that her deceased spouse’s life insurance policy doesn’t make her a millionaire ? Take a quick look over these retirement challenges unique to this type of client so you know how to provide the solutions.

Longevity risk is a risk multiplier for everyone, but it becomes an even greater risk for single women. Wives are outliving their husbands, couples are getting divorced, and women in general are facing more years of retirement than men.

This longevity risk can really affect Social Security (SS) benefits. Many women become unexpectedly single by outliving their spouse. Make sure they plan their SS benefits accordingly because many options like file-and-suspend are disappearing. Secondly, divorce is a challenge in itself, so make sure you know how to maximize SS benefits. A divorced woman can actually claim SS benefits as a retired worker (using her own earnings), as a divorced or surviving spouse (using the spouse’s earnings history), or even a combination of both. Lastly, if a woman worked her whole life alone and plans to retire single, she could be faced with lower earnings due to average wage differences. She may need more guaranteed lifetime income like an annuity. Single women will also face challenges before they actually retire.

Even if a woman doesn’t earn the statistically lower wage-average, many have historically earned ZERO dollars for several years of their career. That is, many women take time out of the workforce completely to be caregivers for both children and parents.

According to The MetLife Study of Caregiving Costs to Caregivers, "For women, the total individual amount of lost wages due to leaving the labor force early because of caregiving responsibilities equals $142,693. The estimated impact of caregiving on lost Social Security benefits is $131,351. A very conservative estimated impact on pensions is approximately $50,000. Thus, in total, the cost impact of caregiving on the individual female caregiver in terms of lost wages and Social Security benefits equals $324,044.”

If parents don’t own long-term care (LTC) insurance, it can cost their daughters a great deal of time, money, and emotion. Planning for LTC can allow a single woman to remain in the workforce, and while planning for the parents’ LTC, she should start her own plan too.

Look, the bottom line is that women in general face more risks and challenges in retirement planning. They may face those when unexpectedly becoming single, or they may want to remain single and face these challenges headlong. You need to help them plan for both. Start by calculating their SS benefit,and then maximize it. If a client’s SS isn’t enough to cover basic living expenses, convince her she will need to buy more guaranteed lifetime income. Next, start a plan for LTC. Show the client how raising her children already limited her SS and other retirement plans; then show her how caring for her parents could cause the same problem. Provide the parents with a plan for LTC, and set up a plan for the rest of the family while you’re at it. The challenges single women will face in retirement can all be addressed with one optimal plan. My whitepaper Retirement Alpha: How Mortality Credits Improve Retirement Outcomes has a whole chapter that is a "must read" for women. Talk to your clients about these issues because you can provide the solutions. Tom Hegna on Demand offers advisor training on these solutions, but did you know you can enroll clients with a Retire Happy Customer Education account? Sit down at your next appointment together, discuss the education they've received, and you’ll be able to provide the products for a plan unique to single women.

Thanks for reading,
-Tom Hegna