Women vs Men
Whether your retirement is decades away or just around the corner, taking time to plan for the Golden Years is a critical aspect of responsible financial management. However, regardless of your level of preparation and attention to detail in regards to your investment strategy for retirement, there are a number of factors that influence your retirement savings that are simply out of your control including educational level and career path.
While not as large a factor, your gender also plays an important role in guiding your decisions as an investor. Indeed, there are several important facts that distinguish the average male investor from the average female investor. So, whether you are a woman or just want to help one you need to understand these critical differences. Collectively, they are an important first step in investment and, ultimately, retirement success.
Women Work and Earn Differently
It is well-known that women make approximately 80 cents on the dollar compared to their male counterparts in the same position. This is the so-called “gender wage gap.” This unfortunate aspect of working as a female combines with the higher probability that they will take time off to raise children or care for elderly parents. This therefore puts many women at a disadvantage when it comes to retirement savings out of the gate.
When there is less money going in, there is usually less coming out.
Women Live Longer
The problem that making less money creates is compounded by another well-known fact: lifespan. Women, on average, outlive men by about 8-10 years. This means that women have a longer horizon to shoot for when it comes to retirement nest eggs. So now, they make less and need more. This is part of the problem when it comes to investing for retirement as a woman, As more and more retail investors flood the markets, the popularity of stock picking services is on the rise. As discussed in this review of a popular stock picking service, these online advisory companies can help average investors achieve above-average returns.
Women Are Risk-Averse
To compound the issue of less money and more time, trends among female investors also reveal that they, as a whole, risk averse. This means that, regardless of their age, women are more likely to keep money in liquid or nearly-liquid forms. Men, on the other hand, are willing to make sacrifices for higher returns.
Some, if not all, of this risk-aversion may relate to a general lack of confidence. In fact, a report from Merrill Lynch Wealth Management, which looked at data from over 11,500 of its customers, found that more than half of the women they served (55%) questioned their own investment knowledge. This lack of confidence was far lower in their male investor population. Just over a quarter of male investors (27%) felt the same way.
This “play it safe” strategy used by women is perhaps most apparent among investors who have money saved outside of employer-sponsored retirement accounts. Male investors, perhaps like those on clicky clicky, often choose to save some money on the side for personal investment purposes. They hope to find that “one great stock” and retire early. Women, however usually just put their extra money into a savings account.
Women Save More
The flip side to the problems that risk-aversion present among female investors, however, is that their trend towards saving has distinct, measureable rewards. Women’s natural instinct to save money and invest it in safe, stable funds, often ends up balancing them out in the end. (Read more: https://criptoeconomia.com.br/en/bitcoin-circuit/)
The paradox here is that men, who are far more likely to trade on a whim or invest in risky markets, are also far more likely to lose principle as the market fluctuates as well as pay heavy fees as they try to bail out of them. Women, who are more likely to ride the waves or stay out of rough waters altogether, therefore enjoy a predictable and steady rate of return.
In fact, regardless of the methods they use, a Vanguard study of over 5,000 investor found that men’s and women’s rates of return are nearly identical over time. They are 10.1% and 9.7% respectively.
Women Can Still Come Out on Top
While many of these facts about women saving for retirement seem grim, they don’t have to be. Sure, someone with less money going into retirement savings means will have less money coming out. In fact, study after study has found that, regardless of the decisions women make when investing for retirement, they end up with less money at the end because they had less going in. It’s simple math.
However, there are ways to manage this gap. There are specific strategies and systems that female investors can use to activate their retirement savings starting now – no matter how old or young they are. I will take a look at these strategies in the next installment in this series.
Investing money for retirement is a critical financial goal, and it’s essential to bridge any potential gaps in savings. Women, who often face unique challenges in retirement planning, can benefit from strategies that help them secure their financial future.
Whether you’re a woman looking to enhance your retirement savings or an investor seeking to maximize returns, Immediate Evex Ai provide valuable support in navigating the complexities of financial markets. In a world where retirement security is a top priority, these platforms offer essential resources to help individuals build and protect their wealth for the long term.