A single financial choice could leave women with a staggering $200,000 less in their retirement savings. But is it fair to ask women to take on more risk? The debate is on!
Just 32 minutes ago, a thought-provoking revelation emerged: women's KiwiSaver balances are significantly lower than men's, and one of the reasons might be their investment choices. Westpac's data shows that while the gender gap has slightly improved, men still dominate in contributions and savings, even though women have a longer average lifespan.
The disparity is evident across all age groups above 18, with the most significant gap in the 30-39 age bracket. Here, men boast an average balance of $28,992, while women lag behind at $21,740. But why?
Sarah Hearn, Westpac's general manager, sheds light on the issue. She attributes the difference to the gender pay gap, career breaks, and women's tendency to opt for less risky funds. And this is where it gets interesting: men are more inclined to invest in growth and high-growth funds, while women lean towards moderate or conservative options.
But here's the catch: higher-risk funds often yield higher long-term returns. Morningstar's data reveals that aggressive funds have outperformed conservative funds by a significant margin over the past decade. This means women, by playing it safe, might be leaving substantial gains on the table.
Westpac's estimates are eye-opening: over 30 years, the difference in returns between conservative and growth funds could amount to over $225,000 for a median earner. Hearn suggests that women, especially those saving for the long term, should reconsider their fund choices and embrace more volatility.
Hearn encourages women to discuss their financial strategies openly. She believes that men are more vocal about their financial affairs, and women could benefit from sharing their KiwiSaver experiences, returns, and fund choices. It's about time we started talking about money, right?
So, should women take on more risk? Hearn advises women to assess their risk tolerance and investment timeframe. She reminds us that while balances may fluctuate, the long-term gains can be worth the short-term volatility. But is this a fair burden to place on women, especially considering the existing gender disparities?
What do you think? Is it time for women to embrace riskier investments, or should they stick to more conservative strategies? Share your thoughts in the comments below and let's keep the conversation going!
