Investing is intimidating for a lot of millennials — and women, in particular. In fact, most Americans — especially millennials — admit that investing is “scary” and “intimidating,” according to research by Ally Invest. The “Someday Scaries” plague about 61 percent of adults who know that, someday, they’ll need to be more financially secure — but they don’t know how to quite get to that comfortable financial place.
Women face especially strong headwinds when it comes to obtaining financial freedom. Despite participating in workplace retirement savings plans just as much as men (and saving more of their income), according to a Bank of America study, women’s retirement balances are only half the size of men’s, according to data from the Vanguard Center for Investor Research.
An amalgamation of the gender pay gap (women still earn just 82.3% of men’s salaries), stereotypical gender roles that force more women out of the office and into the home to care for children than men, burgeoning student loan debt (nearly two-thirds of the all student loan debt, or $929 billion, is held by women), and more means that it’s especially important for women to invest more to save enough for retirement.
But only 59% of women report having confidence in their ability to save for retirement (compared to 78% of men), and less than half (42%) of women are comfortable with their current investment strategies (compared to 65% of men), according to Voya Financial research. Perhaps that’s why, still, one in five women have nothing saved for retirement, according to the CNBC/SurveyMonkey Women at Work Survey. Thirty-four percent of women ages 18 to 29 are among the likeliest to have no retirement savings whatsoever.
So why don’t millennial women invest as much as they perhaps should? Fear.
Millennial women tend to be responsible with their budgets (after all, 70% review their bank accounts at least once a week, and 53% have an emergency fund). But 56% don’t invest due to fear, according to a study by SoFi and Levo League.
Nevertheless, according to a report by Merrill Lynch, 41% of women say their biggest financial regret is not investing more.
“Wall Street has done a great job of creating a façade that is intimidating and confusing to anyone who isn’t in the know and studying up on the markets daily,” writes Francesca Federico for Forbes. “People have been burned by the stock market or taken advantage of by a stockbroker or financial advisor. So, where does anyone turn for help if they can’t trust industry professionals? Female millennials simply do not invest because the task of figuring out how to do it and whom to do it with is too daunting.”
With costly financial advisors and limited product differentiation when it comes to robo-advisors, women (and all investors) have long been relegated to forking their funds over to someone or something else to manage their money without much transparency or trust — yet with hefty fees.
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There’s nothing to fear. (Not even market volatility, thanks to auto-adapting AI!)