Often, men and women are looked upon as having different approach towards life, and this approach is often carried forward in the way they handle their finances. Nevertheless, despite stereotypes, both can be equally good or bad in financial planning.
Gone are the days when women were stereotyped as homemakers and had no word in financial matters and retirement planning. With growing awareness and financial independence, today, more and more women are taking charge of their finances and are proving to be just as good financial planners.
However, investment patterns are influenced by social and financial factors and this brings about a difference in how men and women look at saving and investing. Let us look at how men and women may differ in their approach towards retirement planning, and how to make the most of it.
How men and women differ The survey highlighted some key points where men and women differ in their investment patterns. Usually, women consider the safety first approach and men are not very averse to the high-risk road to investments. As per the survey, over 74 per cent women preferred cash deposits in traditional investment options over other investment tools. Men, on the other hand, preferred long-term investments like real estate, to generate a higher corpus. Men would also like to try their hands at high-risk high-returns options, while women prefer to be steady and safe in their investment patterns.
The essentials of a successful retirement planning Families can take better and smarter financial decisions when both men and women contribute their ideas together. Since a lack of immediate liquidity in a financial emergency makes many investment options unsuitable for retirement funds, sometimes women seem to have their hands on the pulse when it comes to planning and management of retirement corpus, balancing liquidity and financial growth. Men, on the other hand, try out riskier ventures and sometimes grow their money more than women do in a shorter timeframe.
As in everywhere, investors, too, belong to different categories, based on their investment patterns. Different and complimentary approaches, when put together can create a complete portfolio. For instance, the risk-taking approach of one spouse, when combined with the cautious move of the other, will help in diversification of investments and balancing equity and debt investments in a portfolio.
An ideal retirement portfolio should contain a balanced approach for both equity and debt investments, and a long-term vision. Nevertheless, it is essential to remember that while men and women may have their choices in retirement planning, one must start early in life to make an effective retirement corpus.
Juxtaposing opposing qualities can help one achieve a balanced approach in retirement planning. Taking a joint decision with your spouse about retirement planning is likely to bring you better results rather than taking all investment decisions on your own.
An overview of the Survey A survey, The Future of Retirement — A Balancing Act, conducted by a leading private bank, along with IPSOS MORI, the second largest market research organisation in the UK, looked into the aspects of how different genders across the globe look at retirement planning. It covered 16,000 people spread over 15 countries, including over 1,000 respondents from India.
With growing inflation, many Indians have a fear that their retirement money may fall short. About 75 per cent of female and 67 per cent of male respondents from India in the survey disclosed that they are concerned about their retirement corpus. This was reinforced by the sentiment expressed by nearly 30 per cent of women and 27 per cent of men that their salaries were not rising as much as they should, when compared to the rising cost of living. Thankfully, the increasing financial awareness has helped the people of both genders to understand how they need to start retirement planning early in life to bypass this challenge of rising inflation.
