US - Women face greater financial risks during retirement and must adapt their savings plans to accommodate their unique situation, according to a study released by Wharton Financial Institutions Centre.
The study, which combined original research and a meta-analysis of over 70 papers published since 1999, showed women had traditionally been advised to invest in high risk assets in order to finance their longer retirements but this exposed them to unnecessarily high risks over the long term.
Babbel suggested opting for lifetime annuity products to make up between 40-80% of the retirement assets, substantially more than has been previously recommended.
He said: "Economists from all over the world agree on the importance of lifetime income annuities and their central role in retirement planning. However, annuities are even more important for women because their risks are compounded by being faced with longer life expectancy."
Healthy woman at retirement age have a 50% chance of living beyond age 88 and a 25% chance of living beyond 94, as well as potentially outliving their husbands by six years or more, meaning a longer investment horizon was advisable.
He added: "Women have traditionally been advised to aggressively invest in hope of attaining higher returns. This is contrary to what our research demonstrates.
"When compared under the rigorous analytical apparatus of economic science to other available choices for retirement income, lifetime income annuities, when supplemented with fixed income investments and equities, are the best way we have now to provide for retirement."
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