Advisers say women short their retirement needs

MAKING AN EFFECTIVE PLAN: Nancy Micheletti, a personal legacy adviser at Wealth Impact Partners of Warwick, find that women are less likely to be well prepared for their retirement. / PBN PHOTO/ MICHAEL SALERNO
MAKING AN EFFECTIVE PLAN: Nancy Micheletti, a personal legacy adviser at Wealth Impact Partners of Warwick, find that women are less likely to be well prepared for their retirement. / PBN PHOTO/ MICHAEL SALERNO

Many women, especially baby boomers, tend to set aside less for retirement than men, a gender gap arising from generational and social expectations, several Rhode Island financial planners have found, based on their work with couples, widows, and single and divorced women in the state.
“I think it may be the mindset of women that they put away less for retirement, especially the baby boomer population, where the women don’t typically have as much financial education as far as financial strategies, because they often relied on their husbands,” said Nancy Micheletti, a personal legacy adviser in the Warwick office of Wealth Impact Partners, which also has an office in Wellesley, Mass.
“Women want to be educated, and while they may be slow to act at first, we find that when we work with them from our holistic perspective, we find that women do get more comfortable in making financial decisions,” said Micheletti.
The differences between men and women in planning for retirement that Micheletti has noticed in her clients reflect the findings of a random survey of 1,000 adults by TIAA-CREF, the nonprofit investment and insurance services provider for those working in the education, medical, cultural and research fields.
About 56 percent of women said they have confidence that they’re saving enough for retirement, compared with 65 percent of men, according to TIAA-CREF survey results released in November 2013.
Women surveyed said they would be likely to change their saving and spending habits after receiving financial advice, but nearly half said financial advice would cost more than they can afford.
One in three women surveyed said they don’t even have the time to look for help in making financial decisions.
According to recent information from TIAA-CREF, announced in a Sept. 24 press release, studies suggest that women are currently better prepared for retirement than they have ever been, although on average they are still putting aside less of their earnings for retirement than men. Women set aside about 6.9 percent of their earnings, compared with 7.6 percent that men put aside for retirement. That better planning by women, especially those in the generation after the baby boomers, is apparent to Micheletti.
“I’ve found that younger women are definitely much more savvy,” she said. “Women who are 25 to 45 are very astute, and they’re spearheading financial planning, whether they’re married or not married,” she said.
Micheletti, who said she is slightly younger than the boomer generation, has found herself in a unique position as a female financial adviser.
“I don’t have statistics, but it’s amazing how few women are financial advisers,” said Micheletti, who worked with her husband in a jewelry manufacturing business, as well as a mortgage company they launched, and who was a stay-at-home mother of their four children for a while.
Micheletti has an MBA from Bryant University, worked as a financial planner for Texas Instruments in Attleboro, for 10 years and has worked with Wealth Impact Partners for five years.
She thinks the gender differences she’s noticed in financial planning in Rhode Island hold true across the nation.
The gender gap in retirement planning is also a reflection of the reality that “women tend to interrupt their careers,” said Jason Archambault, managing member of SK Wealth Management LLC in Providence.
“Women tend to be the caregivers for children or elderly parents, so they have less income as a result of working less outside the home,” said Archambault. “Women may not have qualified for pensions because they’ve worked less over the years than men.
“I believe there’s a gender gap in retirement savings, but I don’t think it’s intentional,” he said. “Women may tend to be single parents with custody of the children, and maybe they just can’t afford to put as much aside for retirement.”
The fact that women save less for retirement is a concern, because they actually need to plan for a longer retirement than men, he said.
“In general, women live longer than men, so even though our advice to men and women starts out the same, women do generally have to plan for a longer time horizon,” said Archambault.
“We do a lot of social security planning for married couples,” he said. “If the female has less income than her husband, we may have different strategies based on her husband’s earnings. If the man has a pension, we have to consider the amount needed for the survivorship of the woman.” About 75 percent of SK Wealth Management’s clients are in Rhode Island, with some in southeastern Massachusetts and some who have retired to places like Florida.
“A lot of our clients are married, mostly in their 50s and 60s, and sometimes even if the female comes to the meetings, she may not want to get too involved, because the husband is typically the bill-payer,” said Archambault. “However, you don’t see that too often with younger people.”
The survey findings that women save less than men for retirement are an accurate reflection, but “if you dig beneath the raw numbers, women are probably saving less because they’re getting paid less, or they’re not the primary breadwinner, so the husband is maxing out his plan and the woman is just putting some money in there,” said John Finn, a chartered financial consultant and principal of Finn Wealth Management in Middletown.
About half of Finn’s clients are women, either individuals who are divorced or widowed or are the decision-makers because they own their own business or are corporate executives, he said.
Some female clients have not been involved enough in financial decision-making, he said.
“The profile of some of the women we work with is that their husband dies and their attorney or accountant recommends them to us,” said Finn.
“One of the first pieces of advice I give to my clients, but especially to women, is that it’s OK to take care of yourself,” said Finn. “Make sure you have a plan in place that will take care of you first, as opposed to your children or siblings, and then if you have anything left over and you want to give it to yours kids, that’s great.”
Women, more than men, tend to minimize spending by not going on a trip or a cruise or out to dinner, rather than saving for retirement, he said.
“I think that’s a mistake. Put your money into your own retirement before you pay for your kids’ college,” said Finn. “There are student loans, but there are no retirement loans.” •

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