FA Magazine May 2023 - Page 34


SECURE 2.0 Gives Women What They Need , Advisors Say

New provisions in the act support the way women clients live , work and save for retirement , these advisors say .
By Jennifer Lea Reed

WHILE MANY OF THE RETIREMENT PROVIsions within the SECURE 2.0 Act may be useful for any investing American , women in particular may reap the most benefit from the law ’ s changes , according to financial advisors .

That ’ s because new options in the act are meant to address the overall challenges women face going into retirement . For one thing , they live longer than males . And they go into retirement with fewer assets overall because of long-term pay disparity and because they have likely taken breaks in employment for childcare and eldercare .
Jennifer Huisking , vice president of Goldman Sachs Personal Financial Management in Westport , Conn ., says the legislation should be “ wonderfully refreshing ” for women clients and their advisors . “ Women aren ’ t intending to sideline their careers and future security . But they often find that ’ s what happens ,” she says .
As more women become primary advisory clients , rather than just the spouses of clients , they view their finances through a slightly different prism than male investors and often don ’ t have their needs addressed .
“ We need to meet women where they are and value those decisions , but also show them the impact of that , without judgment , so they can go forward with confidence and a sense of control ,” Huisking says .
According to a Goldman Sachs report in December , 50 % of women respondents said their retirement saving is behind schedule , while only 35 % of men said so . Women can see their retirement savings fall behind by as much as 35 % after two four-year periods out of the workforce — one for childcare , one for eldercare .
The study also found that women were having difficulty generating income in retirement , and specifically have trouble making 70 % of their pre-retirement income level , the target that advisors want to see .
In the survey , 80 % of retired women respondents said they are under that target , whereas 70 % of men were . Fifty-eight percent of women respondents said they had come up with less than 50 % of their pre-retirement income in retirement , while only 44 % of men said the same . Only 20 % of women and 30 % of men said they generated more than 70 %.
“ Though women juggle the same types of financial responsibilities as men , more women report that these factors impact their ability to save for retirement ,” the report concluded .
A similar report by Cambridge Investment Research , a Fairfield , Iowa-based financial services consultant affiliated with the RIA of the same name , says that women have a different approach to investing . The report says advisors who don ’ t meet women ’ s needs risk losing out on part of the $ 30 trillion in wealth transfers expected in the United States by 2030 .
“ Many women clients have different values , goals , approaches and communication styles ,” the firm acknowledged in its report last year . “ Financial professionals who fail to make the necessary adjustments may struggle to build strong relationships with women investors .”