Reflecting on International Women’s Month
As we near the end of international women’s month we’d like to reflect on how personal finance uniquely impacts women.
Forty-four percent of American women are the primary breadwinner in their house.1 Yet only 10% of women feel very confident in their ability to fully retire with a comfortable lifestyle.2
Although more women are providing for their families, when it comes to preparing for retirement, they may be leaving their future to chance.
Women and College
The reason behind this disparity doesn't seem to be a lack of education or independence. Today, women are more likely to go to college and graduate than men.3 So what keeps them from taking charge of their long-term financial picture?
One reason may be a lack of confidence. In one recent study, less than half of the more than 2,000 women surveyed said they felt satisfied with their knowledge of finances.4 Women may shy away from discussing money because they don’t want to appear uneducated or naive and hesitate to ask questions as a result.
Wall Street language
Many people may feel uneasy amidst complex calculations and long-term financial projections. Just the jargon of personal finance can be intimidating: 401(k), 403(b), fixed, variable.5 To someone inexperienced in the field of personal finance, it may seem like an entirely different language.
But women need to keep one eye looking toward retirement since they may live longer and could potentially face higher healthcare expenses than men.
Women and Investing
Studies on gender behavior have shown us women are naturally predisposed to avoid risk and are also better able to keep their egos in check. In times of stress, women are often better able to exercise self-control and discipline; and women generally take the long view on matters of life, which means they’re not in as much of a hurry.
And, perhaps, it’s for all of these reasons why women might make better investors than men. Studies have shown that, over a period of time, which includes both up and down markets, women generate returns, on average, higher than men. The most celebrated of reports by Merrill Lynch, which studied the investment decisions of 35,000 households, found that married women outperform men by at least one percentage point and single women by a full point and a half.
The survey found that women were less likely to make the same mistake twice. Of men who reported buying a stock without doing any research, 63% said they did it again, whereas only 47% of women repeated the mistake.
All of this may explain why women adopt a more passive approach to investing. They are more accepting of short-term fluctuations of the markets recognizing that stocks and other market-based assets follow cycles. And, because most women are able to recognize bargains when they see them, they are more likely to add to their stock positions when prices decline. To read more, check out our Women & Investing guide.
If you’ve taken a backseat to your long-term financial strategy, now is the time to pick up the reins and retake control. Please make sure to let us know about your goals and ambitions for retirement. And remember, ask us for clarification if the conversation turns to something unfamiliar. No one was born knowing the ins and outs of personal finance, but it’s important to understand to make informed decisions.
Your Eagle Wealth Team
Medicare Enrollment Ends March 31st
The general enrollment period for Medicare goes from January 1st to March 31st. If you haven’t decided yet, now is the time to check this item off your to-do list.
It may not be clear what this specific enrollment period is for, as several enrollment periods are related to Medicare.
- The enrollment window is for those who haven’t signed up for Medicare Part B but don’t have access to Part B’s special enrollment period.
- You can also use this period to enroll in Medicare Part A if you have to pay a premium but did not sign up for Part A when you were first eligible.
Enrolling can be done online at Medicare.gov. From there, you can get started or make contact with someone who can answer questions and help further.
Medicare plays a critical role in your healthcare coverage in retirement. If you have questions after you have signed up, please reach out.
1. The Wall Street Journal, March 25, 2022
2. The Wall Street Journal, March 25, 2022
3. The Wall Street Journal, March 25, 2022
4. The Wall Street Journal, March 25, 2022
5. The Wall Street Journal, March 24, 2022
6. IRS.gov, June 22, 2021
7. Healthline.com, September 30, 2021
Source: Women and Investing: A Behavioral Finance Perspective. Wealth Management Institute. November 2013