The surging living expenses and household costs have contributed significantly to this unease, with AMP reporting a $13,000 increase in the annual cost of a comfortable retirement within the last five years. Nicola Beswick, founder and managing principal at White Rabbit Advisory, reinforces this sentiment, stating that many women she works with harbour doubts about the sustainability of their retirement lifestyle.
A substantial number of women have spent periods outside the workforce as stay-at-home mothers, which consequently leads to lower superannuation balances. Single women, especially those who are divorced or widowed, face heightened risks due to the lack of dual income from a partner’s superannuation, with only one in five feeling secure about retirement.
Beswick highlights additional concerns, such as women relying on disability and compensation payouts that may not suffice throughout retirement. Women generally live longer and often endure careers impacted by the gender pay gap, exacerbating their financial insecurity. Beswick also underscores that financial literacy acts as a barrier, further diminishing confidence in decision-making regarding their well-being.
Financial challenges like divorce later in life add layers to these anxieties, often leaving women restarting financially without a family home and, subsequently, renting during retirement. This shift can lead to significant instability and anxiety about the future.
To empower their female clients, financial advisers are urged to foster connections among women, promoting engagement and understanding rather than delivering one-sided financial advice. Beswick suggests that advisers should clearly explain the reasons behind financial decisions, fostering trust and encouraging women to follow through with their retirement plans. Such efforts by advisers are essential in enhancing financial security for women and giving them a clearer, more confident view of their financial future.
