Ladies, we gotta get going 

  

Most of us know (or expect) that there are gender-driven differences when it comes to personal financial management. However, a recent conversation and research got me to rethink about the accuracy of these beliefs/generalizations. 

Take for example the below stats, some of these differences are obvious but some others are not. 

• On Investing:
  The average _____ investor keeps most of their portfolio in cash and cash equivalents

• On retirement:
  ______ have more retirement shortfall than ______

• On Saving:
  _____ more inclined to save a greater percentage of salary than _____

• On Spending:
  Affluent _______ in Singapore spend more on themselves than affluent _____.

  _________ spend more in more categories of spending than _________ (including online purchases)

(Answers:  Female, Females/Males, Males/Females, Males/Females, Males/Females)

A couple of surprising answers, right? Who would have thought men can spend AND save more and are more prepared for retirement than women?

Some time ago, a friend asked me during a financial planning session “are women or men more prepared in planning for their retirement?” Almost instantly, I said “women” – because I have always seen females to be the more prudent planners and hence, believed them to be more adequately prepared. However, prudent planning does not necessarily mean more prepared and I think it is important that females get this and know the reasons behind it. 

1. Life expectancy. Women simply have to plan for more. On average, the life expectancy for women is 4-5 years longer than men and this means women need ~ 20-25% more in retirement fund. To make things a little more complicated, one’s nest egg can often be diminished by the spouse who passes on first if money were spent on healthcare. 
2. Wage. Women earn lesser (generally speaking). In the 2014 Labour Force Statistics, women earn lesser than men in all occupational categories except clerical and support. And this is why men can save a higher portion of their income but still have enough/more to spend. Compounded over time, the impact of the income gap is great.
3. Habit. Women invest more conservatively- not just in terms of their risk appetite but in terms of the portion of their savings that they invest (even though they are the better investor by virtue of their long term view and in not being excessively aggressive). In addition, women often start investing only at a later part of their lives, losing out on the benefits of compounding effect. 

With the above being said, women are definitely not doomed for a poor retirement life. We just have to work a little harder, a little faster, a little more so as to get to where we wan to be. Here are 3 ways to get started:

1. Review family insurance polices – to ensure that an ill family member would not result in you depleting your nest egg 
2. Start saving nowing. Ascertain that you save a substantial portion (20-30%) of your income for the long term. not for your handbag, or travel. For yourself.
3. With point  #2, ensure that at least half goes to investing.  

as the saying goes, the best time to plant a tree was 20 years ago. The next best time is now. So ladies, we gotta get going. 

_________________

References: 1 2 3 4 5 6 7