A bold statement: Women's financial choices could be costing them a fortune, and it's time to shine a light on this issue.
Did you know that a simple decision about your KiwiSaver fund could impact your retirement savings by over $200,000? It's a shocking revelation, but one that Westpac is urging women to consider.
The gender gap in KiwiSaver balances is a complex issue, with multiple factors at play. While the gap has narrowed over the years, men still contribute and save more, even though women tend to live longer. This is where it gets controversial: Westpac suggests that women's investment choices may be a significant factor in this gap.
Westpac's data shows that men have higher average balances across all age groups, with the biggest difference seen in the 30-39 age bracket. Men in this group have an average balance of $28,992, while women lag behind at $21,740. This disparity is partly attributed to the gender pay gap and time spent out of the workforce, but there's more to it.
Sarah Hearn, Westpac's general manager, highlights that women are more likely to opt for less risky funds. Men, on average, invest 37% of their balances in growth and high-growth funds, while women hold a larger portion in moderate or conservative funds, at 32%.
Here's the catch: higher-risk funds have the potential for higher returns over time. Morningstar's data backs this up, showing that aggressive funds have returned an average of 9.5% annually over a decade, compared to just 4.2% for conservative funds.
This is where the potential loss of tens of thousands of dollars comes into play. Westpac estimates that the difference in outcomes between conservative and growth funds over 30 years could be a staggering $225,000 for a median earner contributing 6% of their income.
Hearn encourages women to consider their long-term savings goals and the potential benefits of taking on more risk. She believes that by being more open to discussion about financial matters, women can make more informed decisions.
"We know men are more comfortable talking about money, but it's time for women to join the conversation. Let's talk about our KiwiSaver balances, our returns, and the types of funds we're in. It's an important step towards financial empowerment."
So, are you ready to take control of your financial future? It's time to assess your KiwiSaver fund and ensure it aligns with your risk appetite and long-term goals. Remember, retirement may be decades away, but every decision counts.
What do you think? Is this a step towards financial equality, or are there other factors at play? We'd love to hear your thoughts in the comments.
