Looming recession has more women worried about retirement, study shows

The possibility of a recession has an increasing number of women worried about their nest eggs.

According to a Nationwide survey, more than 40% of women believe the U.S. is currently experiencing a financial crisis, with another 24% believing it is nearing one. That said, less than half (45%) of women say they have a strategy in place to protect their assets against market risk in 2023, down from 51% of respondents in 2022.

That lack of preparation might be due to the increasingly large portion who feel there's no way to prepare for a recession. Nearly nine in 10 (87%) women saying that even if they do all the right things to manage their finances, they could still be blindsided by outside events, which is up from 76% who expressed that sentiment in 2022.

“It's important to recognize and consider the unique retirement challenges facing women,” Ann Bair, senior vice president of financial services marketing at Nationwide, said in a statement. “We live longer and typically need to fund more years in retirement than men. Women also tend to have lower savings due to historical wage gaps and more time out of the workforce. The current economic environment has women feeling stressed about their future, but I’m encouraged to see many are taking proactive steps to seek guidance and create a plan.”

The report showed that women who aren't yet retired are changing their approaches to retirement saving given the uncertainty. One-third (31%) of non-retired women investors plan to avoid unnecessary expenses over the next year to save more for retirement, while a quarter (28%) plan to invest more conservatively. And 12% of non-retired women (12%) plan to move to a new location with a lower cost of living this year, which is a sizable number given that just 8.4% of Americans moved in 2021, according to Nationwide.

“Working women are hungry for balance — they are often juggling work, childcare, and assisting aging parents and/or in-laws," said Nina Lloyd, president and CEO of Opus Financial Advisors, part of Advisor Group. "Moving to an area with a lower cost of living can provide much needed respite and an improved quality of life. The pandemic taught us to look for opportunities to improve lifestyle now — rather than putting off relocation until retirement.”

The economic stress has 20% of non-retired women feeling unsure about their ability to retire at all, a 7% increase from 2022. The report shows that 15% of non-retired women say they can't afford to retire at all, up from 11% in 2022.

Women investors are increasingly turning to professional advice to improve the resilience of their portfolios in the face of these economic pressures. More than half of the women surveyed (52%) work with an advisor or financial professional in 2023, compared to 45% in 2022. That compares to 45% of men who are working with an advisor in 2023, down from 64% in 2022.

Nearly all women with an advisor (97%) say working with one helps them to feel more confident in their ability to make good decisions, even during a crisis – up from 88% in 2022, according to Nationwide.

“Gratefully, women are playing a larger role in household financial decisions. As the study displays, women seem to be more willing to make changes to their budgets, lifestyle expenses and location to achieve their long-term goals. This may be what it takes to get through the current economic environment,” said Brian Hartmann, partner at Granite Bridge Wealth Management, part of Advisor Group.