When it comes to retirement savings and income, women are often at a disadvantage. According to one study, for example, women need to save close to £200,000 more during their working lives to enjoy the same retirement income as men. This big pension gap is due to several factors, including a savings shortfall among women, a need to fund a longer retirement (as women live longer than men) and higher care costs.
Despite these disadvantages, it seems today’s women are taking steps that they’re confident will help them ‘future-proof’ their retirement. More specifically, more women are delving into investing, with the majority believing that it will help them achieve their desired retirement income. Here’s the lowdown.
[top_pitch]
Women and investing for retirement: what does the research show?
According to Dr Hedva Ber, global COO and deputy CEO of eToro, women have discovered the power of investing and are using it “as a powerful lever to secure their futures, boost income and/or to build net wealth”.
In fact, research by eToro shows that nearly four in every five female investors (78%) are confident of reaching their desired income in retirement if they persist with their current investment strategy.
Three fifths (59%) of these women expect to reach this goal in under 10 years. The rest (41%) believe it will take more than a decade.
The hugely positive outlook on investing as a sufficient tool for securing their retirement comes despite the fact that half (50%) of the women who were involved in the research actually only started investing in the last two years.
What are women investing in?
The research by eToro shows that some of the most popular investments currently held by female investors are:
UK domestic stocks (40%)
Crypto assets (32%)
Domestic bonds (32%)
Cash (31%)
Foreign stocks (23%)
Alternative investments (19%)
Commodities (13%)
Foreign bonds (12%)
Currencies (11%)
And as for which investments women are planning to invest in for the future, these are the findings:
Crypto assets (34%)
Domestic stocks (31%)
Alternative investments (29%)
Domestic bonds (26%)
Foreign stocks (22%)
Cash (22%)
Commodities (19%)
Foreign bonds (15%)
Currencies (14%)
What can be done to encourage more women to invest?
Despite an increase in the number of female investors in recent years, they are still vastly outnumbered by their male counterparts. The UK, for example, has the eighth-lowest proportion of female investors in the world (only 21%), according to BrokerChooser.
Dr Ber has called for more female role models to encourage even more women to invest.
She said: “Women clearly want to improve their finances and crave more education around investing. We need to respond to the calls for more female role models and ensure they represent the diversity of women who could benefit from knowing more about investing.”
Dr Ber has also called for more financial education to build on the progress that has already been made by women on the investing front.
[middle_pitch]
What could prevent women from achieving their goals?
No matter your level of confidence or gender, it always pays to take a cautious approach when it comes to investing.
After all, investing is inherently risky. There is always the risk that your portfolio will underperform or lose money. And some assets (such as crypto) pose a bigger risk than others.
Luckily, there are ways to minimize the risk of underperformance or loss when it comes to investing. One of the top recommendations by financial analysts and experts, for example, is to practise diversification. This simply means having different types of investments in your portfolio, such as stocks and shares, commodities, crypto assets and bonds.
When you have a well-diversified portfolio, any losses in one category are likely to be offset by gains in another, making it less likely that you will lose money overall.
The post Four in five female investors confident of achieving retirement income goal appeared first on The Motley Fool UK.
Is this little-known company the next ‘Monster’ IPO?
Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.
Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.
The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.
But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.
Click here to see how you can get a copy of this report for yourself today
More reading
Beware! Car insurance loopholes that could cost you a fortune in future
1 FTSE 100 stock to buy and hold for 10 years
4 defensive stocks I’m thinking of buying to protect against market uncertainty
Here’s why I’m watching this FTSE 100 stock, down 40% yesterday
Stocks and shares ISA: avoid this fee trap to save £331k
