Archive for the ‘Women and Investing’ Category

Baby Boomer Retirement May Be A Bust

Sunday, March 21st, 2010

Unless they take action, many baby boomers are heading for a senior bust.

Many of the boomers we know have not saved sufficiently for retirement.  Spooked by the last two bear markets, they took their money out of the stock market, selling off when the market was near its low point.  Now they’re looking for the high returns necessary to produce the income they’ll need when they retire – yet they also want to avoid risk.

Unfortunately for risk-averse investors, there is an inverse relationship between risk and reward.  Investments that offer the potential for high returns usually also carry high risk.  Many investors who need high returns are keeping their money in money market funds or certificates of deposit, which carry almost no risk, but offer returns that fail to keep pace with inflation, let alone provide a real return.

While the investment outlook is admittedly tough for shell-shocked boomers, there are many reasons doing nothing should not be an option.

Don’t Count On Inheritance

Back in the 1990s, many were predicting that baby boomers would inherit trillions of dollars.  A study by Cornell University, for example, famously predicted that boomers would inherit $10.4 trillion.  And in those days, $1 trillion was still a rarely considered sum of money.

Yet it appears that the reality will be far more modest.  Parents of boomers are living longer, their healthcare costs are more expensive than predicted and they’ve also suffered through the same bear markets as their children.  Their inheritance, in many cases, is gone – and they may even be relying on their children for help.

A recent study by the American Association of Retired Persons (AARP) found that only about one in five boomer households has received an inheritance and only 15 percent of remaining boomers still expect to receive one.  Of those who received an inheritance, the median value has been about $64,000 – nice to have, but not enough to sustain another generation during retirement.

Boomers face other problems, too, which we will discuss in our next article.

Women and Investments

Tuesday, January 5th, 2010

What issue do you think women worry about most? You might guess spending quality time with the family, time management, health, reducing stress, or maybe the environment?  While this is from the pre-9/11 era, is still interesting to consider the March 2000 gallop poll shows the top answer was their finances. This response may surprise you now, but consider the following list of financial issues unique to women (results from a women-and-money incubator, and research by William L. Anthes and Bruce W. Most): 

  • “Women are more intimidated than men about financial issues
  • Women earn less money than men
  • Women are less prepared for retirement
  • Women receive smaller retirement benefits
  • Women live longer than men
  • Women are poorer in retirement than men
  • Women are more conservative investors than men”

My name is Brenda Wenning and I am an investment manager. Many of my clients are women investors and with all these “strikes” working against them, my business mission is, first and foremost, to protect and improve their financial health by actively managing their investment risk.

A benefit of my service is the straight forward communication I have with clients. People tend to be afraid of what they don’t understand and in order to have a secure and comfortable financial future, you can’t be afraid of investing. So, I take my role of trusted advisor and educator very seriously. Watch this space for interesting facts, figures and ideas on investing and how you might improve your investment performance in the future. If you have an investment question or comment, please let me hear from you.