The old approaches to retirement planning don't work for many women. Edward Jones is helping change that
In the midst of the COVID-19 pandemic, Edward Jones teamed up with Age Wave to launch the Four Pillars of the New Retirement thought leadership study in the US and Canada. The two companies believe the study, which surveyed 1,000 Canadians, will help women to save for, and thrive in, retirement.
According to Nicole Ewing, senior strategist, advice and guidance at Edward Jones Canada, the study highlighted the "interconnectedness" of the four pillars of the new retirement: health, family, purpose, and finances.
“We see that those pillars shift in retirement, and that they’re all really essential to a successful retirement,” she said.
She said social relationships and a sense of purpose can “dramatically impact health,” and health care costs are a constant financial worry for many of those in retirement.
“Yet, at the same time, financial stress can impact health negatively,” she said. “So, each pillar influences the other, and together they mutually reinforce each other.”
As Ewing and the team at Edward Jones think about the study and what it revealed, she said it really helps them to understand how they can help clients into and through retirement.
“It reinforced that our holistic approach is really the necessary approach,” she said.
The study showed that women generally want financial flexibility and peace of mind, Ewing said, and 78% of women, who are currently retired, see spending time with loved ones as their greatest purpose in retirement. She added women are also 16% more likely to find purpose in giving back or being generous in retirement.
Ewing shared that one of the biggest worries women have is outliving their savings in retirement, as women tend to outlive their male partners by an average of four years.
She added it is important to acknowledge there are financial challenges women may face that men may not, such as longer life expectancy, higher rates of widowhood, and the wage gap (which can impact both retirement savings and pension accumulation).
“Combine that with potentially fewer earning years if they were the primary caregivers in their family – there are different needs and different impacts,” she said. “It’s important that when we look at retirement planning for women, that we’re not using assumptions that don’t apply.”
She believes that by using the four pillars, financial advisors will be in a better position to be the financial guide clients are asking for, especially women.
Ewing was recently a moderator at a Women in Wealth Management event, where she discussed women and retirement with four Edward Jones employees from across Canada: Andrea Andersen, Western Canada Area Leader; Joe Joseph, a financial advisor out of Mississauga, Ont.; Scarlett Pan, a financial advisor from Vancouver, BC; and Erin Roy, financial advisor and Toronto Area Leader.
Andersen said financial advisors need to be able to help their clients to understand the choices they’re making, and what impact their choices could have in the future, particularly women who aren’t involved in their families' finances.
“If they come to us, and we have the opportunity to share with them what is going on, and what their goals look like, and what the choices are that they’re making, and the impact, that’s great, but if they don’t see a financial advisor that’s where we can see some issues,” she said.
Joseph points out that, according to Edward Jones’ survey, 64% of women want to support their loved ones, but the biggest fear for many is becoming a burden to their families. He said, this means there is always a trade off between these opposing goals.
“But to me, these don’t need to be mutually exclusive. When planning for their retirement, I take special care to address these competing goals, so I can demonstrate the trade off when choosing one against the other,” he said, adding this will help them to balance their own financial health, as well as that of their loved ones.
The key to Joseph is a comprehensive retirement strategy that will help them to make the right decisions that are grounded in their family values and will lend them a sense of confidence.
Ultimately, for Roy the key is to be understanding about what’s important to the client.
“As advisors, we need to be interested, not interesting,” said Roy. “The focus needs to be on being interested in the real lives, and the real priorities of our clients, and devoting ourselves in an authentic way to understanding what matters most to them.”