Women and Retirement: Perceptions Are Not Always Reality

SARA SANFORD - SEPTEMBER 24, 2021


One of the top, self-reported reasons some women don’t invest is because we don’t feel confident enough. But there’s some good news for those of us teetering on the edge of investing or investing more – this perceived lack of confidence often has nothing to do with actual performance. Many women who invest outperform their male counterparts.

“Today women’s lifelong financial wellness is at a tipping point. Thanks to a seismic shift toward women’s growing personal and financial power, they are poised to move into true financial independence.”1

Lorna Sabbia, Women & Financial Wellness: Beyond the Bottom Line

As noted in Part 1 of this series, one of the top, self-reported reasons some women don’t invest is because we don’t feel confident enough. But there’s some good news for those of us teetering on the edge of investing or investing more – this perceived lack of confidence often has nothing to do with actual performance. Many women who invest outperform their male counterparts.

A growing body of research suggests that women who invest, either through their brokerage accounts or workplace retirement plans, earn higher portfolio returns than their male peers. A study by Warwick Business School, for example, found female investors outperformed males by 1.8 percent2.  Women who invest may be more likely to maintain balanced portfolios, save more of their income, and remain calm during market swings. This focus often results in sticking to their retirement or investment plan.

As we explored in the previous blog, women experience a range of unique challenges, responsibilities, and milestones. Given that we often live longer, earn less, and take time out of the workforce, it may be important for women to consider a variety of options. There may be a need to look at conservative products or solutions to simultaneously grow and protect your retirement nest egg.

Familiarizing yourself with those products and solutions that can diversify your portfolio may seem time consuming at first, but you don’t have to go it alone. Building or strengthening your relationship with a financial professional can be key to choosing an appropriate balance of diverse investments and making sure you’re not overlooking any opportunities for an income during your retirement years.

Here a few things to keep in mind when choosing a financial professional or continuing your current relationship. Your financial professional should:

  • have an expertise beyond products. They should be an expert in your priorities, values, and retirement vision.
  • be flexible enough to adjust to your level of risk tolerance and willing to explore options that meet your unique needs for protection and growth.  
  • make you feel better and more confident in your path to and through retirement. Asking for referrals from your social circle can help connect you with someone if you are not currently working with anyone or if you feel you need a change.

Ultimately, the success of this relationship often depends on how open you are with uncomfortable topics, how honest you are, and whether or not you’re willing to make a long-term commitment to the relationship and to your financial plan. The benefits of having an advisor usually don’t come overnight. Results can require ongoing interaction, education, and evolution – from both sides.

To learn more about getting started or taking the next step in planning your financial future, please visit Your retirement. Your Plan.

 

 

1. Lorna Sabbia, Mady Dychtwald, “Women & Financial Wellness: Beyond the Bottom Line,” Merrill Lynch Study, Age Wave, 2019.

2. “Who's the Better Investor: Men or Women?,” Fidelity, May 18, 2017. 




About the author

Sara Sanford, Executive Director, Gender Equity Now (GEN)

Sara Sanford is the Executive Director of Gender Equity Now (GEN), and the architect behind the GEN Certification, the first gold standard for gender parity in U.S. businesses.

 

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