Women Are Better Investors Than Men, But Less Financially Secure in Retirement

4 minute read

Yes, according to two studies. In 1998, Brad Barber and Terrance Odean published their now famous, “Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment,” revealing that women had better investment results than men. Another study published in 2018 by The Warwick Business School (UK), “Are Women Better Investors Than Men?” also found women outperformed men.  The Warwick study reported three key contributors to women’s success:

  •  Women traded less frequently
  • Women chose less speculative investments
  • Women had a longer-term perspective

A survey by Fidelity Investments (2016 Who’s the Better Investor: Men or Women?) also found women save more of their paychecks and add more to their account balances.

Female Financial Power

In addition, these successful behaviors bode well for women given their wealth. In the U.S., women control $22 trillion dollars and are responsible for $15 trillion in consumer spending each year (2020 State Street Global Advisors Closing the Gender Gap of Advice Survey). But even with these powerful statistics, women still report a lack of financial confidence and deep concerns about their preparedness for retirement.

Obstacles Women Face

Even with all of this good news, it may seem surprising that a large percentage of women still don’t feel confident about their financial lives and planning for retirement. Many times, it is due to one or more of these obstacles:

  • Wage gap – During their working years, they earn 82 cents of every dollar their white male peers earn which leads to lower savings (2021 World Economic Forum Study)
  • Work gap – Women also have fewer years in the workforce due to caregiving for children and older relatives. This also takes a toll mentally as well as physically
  • Higher health costs – When women are older, their healthcare costs are also on average higher than men
  • Caregiving burdens – Women provide the majority of caregiving for children and aging relatives
  • Longer life expectancy – Women on average live 2-3 years longer than men which adds an increased burden to make sure their money lasts longer
  • Uncoupled – There is a 63 percent chance a woman will outlive her male partner by an average of 12 years (2018 NBER Study)
  • Language barriers – Financial literacy is often not taught in school and many families perpetuate the money taboo

Empowering Women

Finding that confidence and preparedness can happen at any stage of a women’s life, however. In our information age, many women choose to teach themselves money skills (often at no cost). Others may choose to pay to work with a trained financial professional (FP). And good news for women on this last choice – most modern FPs don’t make false assumptions about women and money, especially when it comes to emotions, behaviors, and different experiences. They understand that women are not “one size fits all” and that women need to receive equal measures of IQ and EQ (emotional intelligence). These FPs go beyond simply helping their clients choose the right investments – they take time to understand their clients’ emotional needs (e.g., peace of mind) and become teachers, and coaches looking out for their best interests.

If you’re looking for the right financial professional, consider asking these questions to help you hire the right person:

  • What does women’s financial wellness look like to you?
  • What percent of your clients are women? Married, single, divorced, or widowed?
  • What are the best ways to help me maximize my savings?
  • How do you help women catch up on savings shortfalls?
  • How do you help clients project their healthcare costs?
  • What types of disability polices do you offer?
  • What types of Long-Term Care policies do you offer?
  • How can you help me with my Medicare and Social Security selections?
  • What eldercare planning and caregiving resources do you offer?
  • How can you help me organize my estate planning?

WATCH Your Money Map: The retirement crisis facing women

Kathleen Kingsbury, wealth psychology expert, coach and author of Breaking Money Silence®, and Marcia Mantell, owner of Mantell Retirement Consulting, Inc., joined Jean Chatzky on Your Money Map to discuss the retirement crisis facing women on March 23, 2022.

More than ever, women’s financial lives are central to their overall wellness and the ability to achieve their goals and dreams. Women’s History Month offers us a chance to celebrate the women that came before us and to recognize the powerful community that we all belong to now. Experts, Kathleen Kingsbury and Marcia Mantell, have spent decades advising, writing, and speaking. They have many insights to share on the Retirement Crisis Facing Women and how they can take control of their financial lives.

Kathleen is a wealth psychology expert, founder of KBK Wealth Connection, host of the Breaking Money Silence® podcast, and an internationally published author and speaker. Breaking Money Silence: How to Shatter Money Taboos, Talk Openly about Finances, and Live a Richer Life is Kathleen’s fifth book. Her mission is to empower women, couples, and families (and the advisors who serve them) to shatter money taboos and communicate more effectively about financial matters. Kathleen has appeared on television and written for consumer and trade publications. Her work has been featured in The New York Times, The Wall Street Journal, PBS News Hour, Money Magazine, TODAY Money, Forbes, and CNBC.

Marcia has helped the country’s foremost financial services firms and advisors increase their knowledge of complex retirement concepts and regulations, then turn the technical into the tangible. Through her small business, Mantell Retirement Consulting, Inc., (est. 2005) Marcia develops innovative retirement income planning workshops and programs, fun and engaging retirement education programs, and seminars, and writes extensively as a guest columnist and content creator and curator. She is considered a retirement industry go-to-person for Social Security and Medicare expert-level information.

Kathleen and Marcia will share their insights and experiences working with women and helping them be more financially secure in retirement on the Alliance’s popular Your Money Map show hosted by Jean Chatzky tomorrow at 2:00 PM EST. Tune in here.

And to get a snapshot of whether you’ll have enough retirement income to cover your basic expenses and live the life you want in retirement, get your RISE Score® here: https://www.protectedincome.org/rise-calculator/

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