New Study Highlights Urgent Financial Risks for Women Entering Peak Retirement Years

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Jul 16, 2024, 09:16 ET

Over Half of Women Nearing Retirement Age Have Less Than $100K in Savings, Exposing a Critical Gender Divide

WASHINGTON, July 16, 2024 /PRNewswire/ -- An alarming 51% of women in the Peak 65^® Zone have less than $100,000 in assets, and among single women in this demographic, the number jumps to 67% who have less than $100,000 in assets for retirement. More than 4.1 million Americans will turn 65 this year, marking the beginning of what the Alliance calls the Peak 65 Zone, a historic surge that will continue each year through 2027. These statistics highlight a growing financial crisis among retirement-age women.

The Alliance for Lifetime Income's 2024 Protected Retirement Income and Planning (PRIP) annual study, now in its sixth year, examines the attitudes and behaviors toward retirement savings of Americans ages 61 to 65, known as Peak 65 consumers. PRIP is the only research of its kind that simultaneously surveys both consumers and financial advisors. The second chapter of the report, released today, highlights the gender divide's significant role in the retirement crisis.

"The long-running effects of women earning less and saving less during their working years are now becoming magnified and felt by millions of Peak 65 women entering retirement," said Jean Statler, CEO of the Alliance for Lifetime Income. "Women also live much longer and receive less protected income from Social Security on average, making them especially vulnerable to outliving their savings. It's no wonder that this year's study shows that women overwhelmingly say protection is very important to them when planning for retirement. Annuities offer a lifeline by guaranteeing income for life, empowering women to navigate retirement with confidence and dignity."

Key Chapter 2 PRIP Findings:

58% of Peak 65 women are married or living with a partner, while 42% are single, divorced, separated, or widowed.
Single/divorced/widowed women are more vulnerable, with 67% having less than $100,000 in household assets.
Women are less confident than men about various aspects of creating their retirement income.
Women are more likely than men to say "protection" is very important to them when planning for retirement (76%) compared to men (67%).
Peak 65 women who work with a financial professional are more interested in asset protection than men. Over 9 in 10 (92%) of Peak 65 women say it is "very important" that financial advisors identify ways to protect their assets compared to 82% of Peak 65 men.
48% of women are worried about making complicated financial decisions due to potential cognitive decline compared to 36% of men.
Only 39% of women understand the role annuities play in a retirement plan compared with 52% of men.

"Women are at high risk of financial insecurity in retirement," said Jean Chatzky, Education Fellow with the Alliance's Retirement Income Institute, and CEO of HerMoney. "This latest PRIP report shows how much women value protected income -- essentially a paycheck for life -- that tools like annuities can provide in retirement. Unfortunately, there's a huge knowledge gap preventing women from accessing these tools in enough time to make a difference."

PRIP findings align with 2024 Peak Boomers Economic Impact Study which shows large disparities between Peak Boomer women and men.
This second chapter of the 2024 PRIP study aligns with findings from the Peak Boomers Economic Impact Study, a definitive economic study released in April 2024 and commissioned by the Alliance's Retirement Income Institute. Authored by Robert J. Shapiro, former Under Secretary of Commerce for Economic Affairs, the study examines the economic impact of Peak 65 consumers and finds that two-thirds of Peak 65 Boomers will struggle to maintain their lifestyles in retirement based on their assets and their likelihood of living up to 20 or more years in retirement.

Median retirement savings for Peak Boomer women is $185,000 versus $269,000 for Peak Boomer men.
The median Social Security benefit for retired Peak Boomer women will be $21,400 versus $28,400 for Peak Boomer men, a disparity of one-third.
48% of male Peak Boomers have defined contribution (DC) plans with accounts worth $99,000 versus 41% of women with DC plan assets of $60,000.
By 2030, 48,400 peak boomers with few assets and very low incomes will qualify for SSI benefits (average $6,900 per year), and 69% will be women versus 31% men.

"There's a big disconnect between the four decades of saving that women know we have to do and using those accumulated assets to provide for the rest of our lives. It's time for planners, retirement plan providers, and other educators to make decumulation -- making the money last -- part of the conversation," said Chatzky.

The PRIP online survey of consumers was conducted by Artemis Strategy Group from February 15 to March 2, 2024. The 2,516 consumers surveyed are ages 45 to 75, of which 505 are an oversample of Peak 65 consumers ages 61 to 65, for a total of 886 Peak 65 consumers. Data is weighted to align with the population on age, income by gender, race/Hispanic ethnicity, region, work and retirement status, assets, and education. From February 12 to March 4, 2024, PRIP 2024 also surveyed 508 financial professionals who conduct retirement planning for individual clients.

About the Alliance for Lifetime Income
The Alliance for Lifetime Income (ALI) is a non-profit 501(c)(6) consumer education organization based in Washington, D.C., that creates awareness and educates Americans about the value and importance of having protected income in retirement. Our vision is for a country where no American has to face the prospect of running out of money in retirement. The Alliance provides consumers and financial professionals with unique educational resources and interactive tools to use in building retirement income strategies and plans. We believe annuities – one of only three sources of protected lifetime income – can be an important part of the solution for retirement security in America. The Alliance's Retirement Income Institute houses the leading retirement scholars and experts who create evidence-based research and analysis, with practical ideas and actions to help protect retirees. For more information about the Alliance, visit www.protectedincome.org.

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Contact: Suzy Wagner
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SOURCE Alliance for Lifetime Income