New research shared exclusively with Fortune reveals that almost 20% of American women possessing over $1 million in assets indicate they have no plans to retire, a figure substantially higher than that of men.
TL;DR
- One in five millionaire women plan to work indefinitely, significantly more than millionaire men.
- Women prioritize sustaining expenditures and safeguarding assets as key investment goals.
- Women's portfolios favor equities less than men's, with more cash and fixed income holdings.
- Women view cryptocurrency as riskiest; Goldman Sachs sees wealth transfer reshaping investments.
A Goldman survey encompassing over 1,000 U.S. Among high-net-worth investors, 18% of women, whose average age exceeds 60, indicated they have no intention of retiring. This observation applies to just 11% of men.
The report, named “Opening the Door to Alternatives,”, revealed that women primarily pursued three investment objectives. The foremost goal was sustaining their expenditures, cited by 48% of women as a driving factor. Close behind, at 47%, was another motivation. They're aiming to safeguard their assets.
An additional 44% indicated their investment approach encompassed preparing for a comfortable retirement, and women, on average, set aside 17% of their monthly earnings. The women Goldman interviewed reported an average annual income just below $550,000.
In addition to examining women's financial objectives, the study also investigated the distinctions between their investment approaches and those of men. Although women investors favored equities, making up 40% of their portfolios, this was a lower proportion than men, who invested 45% in equities.
Women's holdings included slightly more cash (21% compared to men's 19%) and a bit more in fixed income (25% versus men's 23%).
When developing their investment plans, female investors placed a strong emphasis on performance, pinpointing it as the primary factor they consider before making any new acquisitions. Conversely, their attention is more on risk; 92% of the women Goldman interviewed did not possess alternatives, and 34% considered the asset class excessively risky.
Even so, female investors didn't consider alternatives the riskiest; they stated that cryptocurrency was by a significant margin the least dependable asset when contrasted with U.S. Stocks, for example, which only 22% of women classed as “high risk.”
As women increasingly gain economic influence due to the spousal aspect of the Great Wealth Transfer, this situation might evolve.
“As wealth accumulates, so too does the imperative to diversify beyond traditional markets and explore dynamic asset allocation models,” said Kyle Kniffen, global head of alternatives for third party wealth at Goldman Sachs Asset Management. He stated: “This approach leverages alternative investments to seek enhanced returns and capital preservation, moving beyond conventional portfolios to optimize long-term financial health.”
Women are transforming the investment landscape.
Over the next few decades, women are expected to reshape investment trends due to wealth they'll receive in the “Great Wealth Transfer.”
The “sideways succession” of female inheritance has been put at some $9 trillion according to studies, as part of the broader shift over the next 20 to 30 years, with some $124 trillion being passed down from older generations to their Baby boomers, those born between 1946 and 1964, are recognized as the most affluent generation ever, surpassing their younger counterparts.
A recent study from J.P. Morgan Wealth Management discovered that most women aren't depending on the money. While travel is their preferred way to spend, women are actually investing their inheritances. JP reports that 45% of women who've already received wealth have invested it, and 43% have used it to settle debts. Indebtedness.
Goldman's report noted this change in investment influence coincides with a market in transition. Kniffen and Kristin Olson, who heads global alternatives for wealth at Goldman Sachs, commented: "We believe private markets are experiencing a major shift, transitioning from a landscape primarily controlled by institutions." The investment landscape is shifting to become more accessible for individual investors. We anticipate this trend will pick up speed, fueled by the desire for varied investments and substantial profits, particularly as businesses choose to stay private for extended periods, obtaining funding from non-traditional avenues. Instead of public exchanges.
As such, the duo highlighted it is important to address the “perception gap” between the opportunities offered by alternatives and the assumed risk, with Olson adding: “Investors have opportunities to diversify across To diversify investors' public market holdings with different strategies, locations, past vintages, and fund managers, and then adjust the investment mix periodically to align with the portfolio's specific objectives and risk tolerance, And considerations regarding targets and liquidity.