Women and retirement: building long-term financial security

By Shalini Guglani, Wealth Divisional Director | Citizens Wealth Management

Successful retirement planning starts with understanding the full financial picture. For women, that picture often includes both meaningful opportunities and distinct challenges.

Longer life expectancies, evolving career patterns and a growing role in the Great Wealth Transfer all influence how women experience retirement. While these factors don't change the goal of retirement planning, they can affect how that goal is pursued and sustained.

Taking a holistic view of risk management, income strategy and estate planning can help women approach retirement with greater confidence and financial security.

How retirement risks can affect women over time

Risk management is foundational to retirement planning. For women, it's especially important to understand how key risks intersect and compound in retirement, especially across longer planning horizons.

Understanding the impact of longevity risk

Longevity risk, defined as the risk of outliving your savings, is often considered to be one of the most significant risks in retirement. The longer the retirement, the longer savings need to last. Given that women have a longer average life expectancy than men, they often have heightened exposure to this risk.

When life expectancy is referenced, it's typically life expectancy at birth — approximately 81 years for women and 76 years for men.¹ When planning for retirement, however, it's more helpful to consider life expectancy from retirement age. For example, a 65-year-old woman has an average life expectancy of nearly 86, compared with approximately 83 for men.²

Since life expectancy reflects an average, it's also important to recognize that roughly half of individuals will live beyond it. For women, this means that many who reach their mid-60s could live well into their 90s or longer, making a 25- to 30-year retirement a realistic planning horizon.

Longer life spans can also increase exposure to other risks. For example, health care costs tend to rise with age, and the likelihood of needing long-term care can increase throughout retirement. Inflation can gradually erode purchasing power, with a more pronounced effect over longer time horizons.

Managing these interconnected risks is central to building a retirement strategy designed to support long-term financial security.

The effect of career interruptions on retirement

Longer retirements can change how income planning is approached, but factors during working years impact retirement outcomes too.

For example, career interruptions — often related to caring for children, aging parents or other family members — can influence lifetime earnings and reduce retirement contributions. Social Security benefits, which are calculated using a worker's highest 35 years of indexed earnings, may also be impacted by periods of reduced or no income. According to the U.S. Department of Labor, unpaid family caregiving reduces a mother's lifetime earnings by an estimated 15%.³

These factors can place additional pressure on personal savings and underscore the importance of thoughtful retirement income planning.

Building reliable income sources

Many retirement income strategies begin with identifying sources designed to provide steady income throughout retirement. These may include:

• Social Security: Eligible retirees may claim Social Security benefits between ages 62 and 70. Claiming before your full retirement age (67 for those born 1960 or later) reduces monthly benefits, while delaying benefits increases them.
• Pensions: When available, pensions can provide a steady baseline of income throughout retirement.
• Annuities: Certain annuities are designed to offer guaranteed income that may help cover essential expenses, providing a layer of financial stability regardless of market conditions.

Together, these sources can establish a foundation of income that can be used to cover expenses before tapping into retirement savings.

Beyond guaranteed income, a sustainable withdrawal strategy for savings and investments plays an important role in supporting retirement spending.

A disciplined investment approach can help maintain some exposure to growth while also aligning with your long-term income needs. The goal is to create the right balance: supporting your lifestyle needs now while maintaining flexibility throughout retirement.

Estate planning as a pillar of retirement security

Income planning is only one component of long-term financial security. As retirement unfolds, decisions about how assets are owned, protected and ultimately transferred become increasingly important.

By 2048, an estimated $124 trillion is expected to change hands as part of the Great Wealth Transfer.⁴ Approximately $54 trillion of that amount is expected to pass to widows, with 95% going to women.⁵ As a result, women will increasingly find themselves taking primary responsibility for assets transferred from a spouse, managing them for their own retirement while also planning for future generations.

Estate planning helps bring structure to this role. It clarifies how assets should be handled, supports family intentions and can help reduce uncertainty during major life transitions.

Essential estate planning steps

A solid estate plan includes several core documents:

• Will: Specifies how assets should be distributed.
• Power of attorney: Designates a trusted person to handle financial and legal matters on your behalf if you become incapacitated.
• Health care proxy: Appoints someone to make medical decisions for you if you can't make them yourself.
• Advance medical directives: Outlines preferences for medical care if you aren't able to communicate your own wishes.
• Beneficiary designations: Should be reviewed regularly, as beneficiaries named on accounts and policies override instructions in a will.

Depending on your situation, a trust may also be appropriate. Trusts can offer added control over how and when assets are distributed and help manage tax considerations.

Once your plan is in place, communication matters. Sharing intentions with family members and revisiting your documents periodically, especially after major life changes, can help ensure plans remain aligned as needs evolve.

Preparing for a secure retirement

For many women, retirement planning includes unique considerations alongside the typical challenges and opportunities. With a well-crafted strategy, it can also offer clarity and perspective.

Beginning the conversation early, revisiting strategies as life evolves and working with trusted professionals can help ensure your plan remains resilient through changing circumstances. A Citizens Wealth Advisor* can help you create a personalized retirement plan that reflects your financial situation, priorities and long-term outlook — so you can approach your next chapter with confidence.

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