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A recent report from Goldman Sachs Asset Management (GSAM) cited one provider who saw a 367% growth in women investors from February 2020 to February 2021.2
Looking at the decade ahead, the Boston Consulting Group expects women’s wealth to grow $5 trillion globally every year.3
However, while women are investing more, their account balances still lag those of men, according to GSAM.1
The current macro backdrop of modest economic growth, moderate public market returns and a higher cost of living is making it challenging for all investors to meet their financial goals—in the short and long term. According to a recent Goldman Sachs survey, top worries for US investors preparing for retirement are increased costs from elevated inflation and potential future reductions in Social Security payments.
But in addition to these overarching concerns, women face unique issues in building their investment portfolios including: lower earnings power, longer lifespans and a greater amount of time spent out of the workforce.
Let’s take a closer look at these challenges and some potential solutions that could help women bridge the gap.
Women’s lifetime retirement contributions fall 30% short of their male peers on average.4 Why? Consider this trifecta of contributing factors:
Additionally, while women have a growing need and appetite for financial advice, today they remain financially underserved. Nearly 70% of US women have never met with a financial advisor, compared to 41% of men.9
Women can help maximize their chances of reaching financial goals by setting a strategic asset allocation for their investments. Here are a few potential practices to consider:
Working with an experienced financial professional can help women, or any investor, determine the best allocation for their circumstances.
If this article sparks any questions about your personal situation, connect with your Goldman Sachs advisor. Don’t have a Goldman Sachs advisor? Contact us to start a conversation.
2 Fidelity, Robinhood, eToro, and Goldman Sachs Asset Management. As of March 1, 2023. Data reflects growth in new investing accounts during the COVID-19 pandemic.
4 US Government Accountability Office, The Gender Pay Gap and Its Effect on Women’s Retirement Savings, as of March 24, 2021.
5 US Bureau of Labor Statistics, Report 1097, as of March 2022.
6 US Senate Joint Economic Committee, Gender Pay Inequality, Consequences for Women, Families, and the Economy, as of 2016.
8 Administration for Community Living, 2018 Profile of Older Americans, as of May 31, 2019.
9 Ellevest, The State of Women’s Financial Wellness in 2022, as of August 2022.
Based on “Bridge the Female Investing Gap” Insights by Goldman Sachs Asset Management.
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Updated for tax year 2022