Welcome to our #147 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we focus on the annual report published by the Personal Finance (P-Fin) Index (US), which found that 53% of American adults do not know how long people live in retirement, even though women tend to have a better idea than men.
‘Longevity literacy’ tends to have a high impact on people’s retirement planning and therefore how much money they have to retire on.
And don’t forget to sign up for our event Thursday, 19th January at 6pm UK time.
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You can review the news in brief so you stay on top of global financial, economic and investing trends.
I hope you enjoy this week’s newsletter.
Jana
‘Longevity literacy’: women have a more accurate understanding of longevity than men
New calculation in the annual Personal Finance (P-Fin) Index shows ‘longevity literacy’ is key to being prepared financially for retirement.
To ensure quality planning for retirement, people need to understand how long they are likely to live in retirement.
But according to the Personal Finance (P-Fin) Index, an annual survey of more than 3,500 adults in the US, 53% of Americans underestimate how long people live in retirement ie they have low levels of ‘longevity literacy’.
Women (43%) seemed to have a more accurate view of how long they would live, compared to men (32%). This is in contrast to financial literacy levels, where men tend to rank higher.
Why is ‘longevity literacy’ important?
Based on the survey, people who incorporate a time horizon in their retirement planning are more likely to save for retirement and, unsurprisingly, will have more money in retirement as a result.
According to Annamaria Lusardi, University Professor at GW and GFLEC's Academic Director:
“This research shows that if we want to create better retirement outcomes, we need to start by making sure people understand how long they are going to live in retirement..”
Here are the key results from the survey: (people still in the workforce & retirees)
81% saved for retirement while they were working, compared to 57% of those with poor longevity literacy.
54% have tried calculating the overall amount they need to save, compared to 30% of those with poor literacy.
40% find it very easy to make ends meet – almost twice as many as those with poor literacy (23%).
40% are very confident about having enough money to live comfortably throughout retirement, compared to 25% of those with poor literacy.
Only 17% said they have a lifestyle that falls short of their pre-retirement expectations. For those with poor literacy, more than twice as many (37%) agreed.
One possible explanation for women having higher ‘longevity literacy’…
…is that they have traditionally been more influential in making healthcare decisions in the household compared to men. Also, women are aware that they tend to live longer than men (by an average of 7 years).
Given that women are still paid less than men, tend to take more career breaks, work part-time, save and invest less money therefore accumulate less wealth over their lifetime, it is crucial that women apply their ‘longevity literacy’ to their retirement planning.
News in Brief
Financial news
The S&P 500 and Nasdaq both posting their best weekly performances since November. Nasdaq has added 4.8%, S&P 500 rose 2.7% this week.
On Wednesday, FTSE 100 finished at highest close since 2018. It would appear that while consumers are becoming choosier about where they spend their money, they are still spending it.
US is punching well above its weight: the US stock market value has reached 60% of global total, 15ppts >long-term average. US real footprint much smaller: ~50% of corp earnings, 25% of world GDP, 1/5th of listed comps, 4% of global population.
To put things into perspective: the Rest of the World (RoW) is trading at a massive discount to US equities.
Global economy risks second recession within three years, warns World Bank. It has cut its 2023 growth forecast from 2.9% to 1.7% after the risks it identified six months ago all materialised.
US will hit its debt limit Thursday, start taking steps to avoid default, Yellen warns Congress.
Gold rallied $1,900+ an ounce for the first time since May after US inflation data matched forecasts, giving the Federal Reserve room to slow the pace of its rate hikes.
Bank of England warns high inflation could last longer than expected. Chief economist says risks remain despite fall in wholesale energy prices and UK on brink of recession.
Apple & Amazon have lost almost $2tn in combined value (roughly Switzerland’s entire market cap) since hitting record highs, BBG has calculated. The iPhone maker has lost $916bn from its peak in January 2022, while e-commerce giant is down $991bn since topping out in July 2021.
Crypto: bitcoin, ethereum, DeFi & NFTs
Bitcoin jumps $20,000+ for first time since November amid optimism around inflation. It has gained gained 25% year to date.
Ethereum rose an encouraging 21% over the course of the week, crossing the $1,400 mark Thursday and is sitting at $1,525 on Sunday morning.
Collapsed crypto exchange FTX located $5bn in assets this week, tied up in cash and liquid crypto.
NFT blue-chip Azuki's new virtual city Hilumia touches physical and digital worlds.
Coffee Break? Read This
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