Welcome to our #143 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we highlight the research report by Goldman Sachs (US) which centres on women and their retirement.
One of their key findings is that women are more likely, at 50%, to say they are behind on their retirement saving, compared to 35% of men.
We explain why women’s retirement savings fall short and what women can do about it. It’s never too late to start engaging with your money to ensure your financial security.
And don’t forget to listen to The Purse Podcast with Julie Castro Abrams about how women invest in venture.
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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.
Until next week,
Jana
Report: women face more obstacles in saving for retirement.
A new report by Goldman Sachs (US) is published about women and their retirement.
According to a new report by Goldman Sachs (US), women are more likely, at 50%, to say they are behind on their retirement saving, compared to 35% of men.
Whilst 47% of women said that they were ahead or on track for their retirement savings, they still fall short compared to men (67% said that they were ahead or on track).
Why do women’s retirement savings fall short?
Women still earn less than men whether they have children or not (women in their 40s with no children earn 12% less than men with no children). And on average have one fifth of the pension pot men do when they retire.
Women are more likely to have career interruptions, work part-time or are in temporary employment and do far more unpaid childcare and housework.
Women who are divorced or separated have less savings than their ex-partners. They are also more likely to suffer from a mental health condition. And this is likely to become a barrier to work especially as women get older.
But women who choose never to marry, according to research from the Centre for Retirement Research at Boston College, fare better than their married female peers.
Never married women tend to have more stable wealth, whilst married women experience declining wealth due to their spouse.
And based on research, married women (or women who are in a relationship) tend to defer long-term investing decision-making to their male partner.
Many may not engage with their (long-term) money until a recent life event like a divorce or the death of a spouse, which is a very challenging time to start.
Also, consider that women live longer than their male partner. They are more likely to experience longer periods of ill health in later life. And it follows that the cost of care for women is much higher.
A woman’s life trajectory is different to a man’s
This often leaves women with less money to save and less money to invest, which compounds negatively over a lifetime.
It is therefore no surprise that women are exposed to far more financial risk. And this means they are more vulnerable to financial shock than men, especially as they get older.
Here are the key findings in the report
Top concerns preparing for retirement:
51% have insufficient savings
24% of working women are more likely to withdraw money during recent market volatility (compared to 17% of men).
8 in 10 women report that their retirement income is less than 70% of their pre-retirement income (a common guideline).
48% are concerned about not receiving a salary any more
36% more of retired women had to take time away from the workforce to provide caregiving (compared to 21% of men).
60%+ more women retired earlier than planned, with health reasons being the top reason for retiring early at 29%.
48% are concerned about inflation
Top sources of retirement education and advice:
32% seek financial advice from family members
31% are part of an employer programme
27% have a financial advisor
And 69% of women choose to manage their own savings.
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So what can women do to save more for retirement?
Get support: start working with a financial counsellor, a financial advisor or an accountability partner. Make a plan.
Get clear on how much you need to retire on ie what’s your number?
Know how much is in your retirement. Consolidate your retirement pots (reduce the fees you have to pay).
Talk to your partner (if you have one). And agree on a plan so you can achieve your retirement number. Meet regularly to discuss your/your family’s finances.
Review your monthly spending-where can you reduce your spending?
Consider how to increase your overall level of income.
Increase your monthly pension contributions. Setup a SIPP in you are self-employed.
Live within your means and invest the difference.
Stay engaged with your money and long term financial growth.
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What next? (Re) listen to The Purse Podcast:
#37: Marriage and divorce: how to manage your money with Mary Waring
#50: How women take charge of their money and invest for the long-term with Heather McGregor
News in Brief
Financial news
The US recession alarm is getting louder. US yield curve most inverted since 1981: US 2s/10s yield spread at -84bps.
Looks like it was another bear market rally (after all). Wall Street continued its slide with S&P 500 dropped below 200d moving average.
The European Central Bank (ECB) deleveraging continues for a second week. Balance sheet shrank by €500m in the past week. Total assets now at €8,470.9bn, equal to 66% of Eurozone GDP vs Fed's 33% and BoJ's 128%.
UK to fall into year-long recession, CBI warns. This is the ‘stagflation’ combination of rising inflation, negative growth and plummeting business investment weighs on the economy.
Average house prices fell 2.3% in November, biggest drop since financial crisis, knocking average house price down by almost £7,000.
Despite this year’s bear market, Bank of America points out investors bought $800bn of ETFs, 2nd most on record. Equity ETFs have added $7tn in assets since 2000 as transaction costs have fallen 60%.
Crypto: bitcoin, ethereum, DeFi & NFTs
Bitcoin, ether jump with stocks on US job report release. Bitcoin is back above $17,000 and ether is trading at circa $1,200+.
Report: SBF tried to destabilise crypto market to save FTX. Trades made by Alameda Research were reportedly focusing on depeg Tether's stablecoin.
Caroline Ellison Hires SEC’s former top crypto cop for FTX probe. Former NY federal prosecutor also on ex-Alameda CEO’s case.
Bank of England opens bids for CBDC sample wallet proof of concept. The budget range for the initial five-month contract is £200,000 ($245,200).
Blue-chip NFT sales surge as ether price stagnates. Trading volumes for some top NFT projects are surging while the price of ether stagnates below $1,300.
The Purse Podcast
We cover the following in our conversation:
The early stage VC fund: How Women Invest
Julie's journey for setting up the fund
How Julie has raised funding from female investors
And more.
Please enjoy! Listen on Apple Podcasts and Spotify+
Coffee Break? Read This
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and janicka.
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