Over four in 10 working women expect to delay retirement to age 70 because of insufficient retirement savings — if they plan on retiring at all, according to a Transamerica study published last month.
Younger generations tend to have less money saved in an emergency fund than older generations, with Gen Z women having a median savings of $500, while Baby Boomer women have a median savings of $7,000, according to the study. Overall, women from any generation have a median emergency savings of $2,000.
Of the female respondents who said they plan to work full or part time beyond the age of 65 or forego retirement entirely, 81% cited financial reasons as the primary reason.
Among women, the total retirement savings are also much lower on average than their male counterparts, according to the study.
“Women’s total savings in household retirement accounts is less than half of men’s ($43,000, $91,000 estimated medians) in late 2021,” the study notes. “Men are significantly more likely than women to have saved $250,000 or more in total household retirement accounts (32%, 21%). A worrisome 25% of women and 16% of men have saved less than $10,000 or nothing at all.”
Some of the study statistics highlight the potential for how reverse mortgages could benefit single women, which is the strongest demographic for the product outside of couples. According to the Federal Housing Administration (FHA) Annual Report to Congress, released last month, single female borrowers made up over a third of all Home Equity Conversion Mortgage (HECM) borrowers in the 2022 fiscal year.
“In FY 2022, 35.23% of HECM endorsements served singular female borrowers, 19.48% served singular male borrowers, and 42.39% served multiple borrowers,” the report states.
While this composition has remained “consistent since FY 2009,” according to the report, the reverse mortgage industry, which is in need of new borrowers, could benefit if loan originators identify borrowers who struggle with cash flow in or near retirement. And according to the recent data from Transamerica, senior women may fit that bill.