A new study from the US has found that almost three quarters of young women are investing outside their retirement accounts, with two thirds recognising the value of investing for a specific goal, compared to 56 percent of men in the same age-bracket.
Fidelity Investments’ 2021 Women and Investing Study narrowed down the results from a US-wide survey of over 2,400 female and male adults over the month of July.
The findings from the study showed remarkable growth during the last 18 months over the course of the pandemic, especially among females aged between 25 to 40, who have an income of more than $68,000 and put money into a workplace retirement plan.
Fidelity’s Head of Women Investors and Customer Engagement believes the results from the latest study prove that young women have a voracious interest in getting their money to do more.
“One of the biggest regrets for boomer women is not investing more when they were younger,” Lorna Kapusta said. “But younger women recognise investing is an important path for them to achieve their goals.”
Kapusta added that despite the results showing the vast majority of women still believe “picking individual stocks” is a necessary skill to have before embarking on the practice of investing, the younger generation have successfully refashioned these perceptions.
“That’s an important change for women overall,” she said. “It’s a real turning point.”
Research in the past several years has shown that on average, women retire with significantly less savings than men.
In Australia, women retire with almost 50 percent less superannuation than men. More than one fifth of women retire with no superannuation at all, and women around retirement age are the fastest growing group of people experiencing homelessness.
A recent report conducted by Bank of America Merrill Lynch found that before the pandemic, women were retiring with US$70,000 less than men.
Another survey showed that almost 1 in 5 women had nothing saved throughout 2020.
The National Institute on Retirement Security in Washington D.C also conducted a survey in February this year, showing that that roughly 60 percent of women worry about retirement, compared to 51 percent of men.
Despite the recent strides made by younger women, a lack of confidence in investing still remains — one which exists across multiple generations.
Fidelity’s latest study revealed that only 35 percent of women feel “confident” their non-retirement savings are fittingly invested.
“Two-thirds do not feel comfortable in their ability to make investment decisions,” Lorna Kapusta told CNBC. “We’re actually seeing that [younger women] are very similar to the older generation.”
Earlier this year, Kapusta, a Boston-based former Vice President of the Marketing and Partnerships at American Express, launched a virtual pop-up experience that addressed topics which she said women have been asking about most during the pandemic.
“Getting more hands-on with our finances has become a top priority for so many,” she told the start-up newspaper Grit Daily. “The program is a new iteration of our Women Talk Money program.”
“I am committed to helping women make informed financial decisions and become more financially confident in their daily lives,” she added. “At Fidelity, we are focused on educating women on how to make their money work as hard as they do, to help achieve the goals they have for themselves and their families.”
Read the study here.