Why It’s Good That 76 Percent of Women Reported Being Their Household’s Primary Retirement Planner

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A new report shows that more women are taking on a greater role in investing and family financial planning — and this could spell great news for the economy.

Okay, hold up, how is this possible? No, I’m not saying that women will prevent the next (inevitable) financial disaster. Nor am I implying that women always do the right thing with money all the time (really, we don’t). But I am saying this: More women investing is a good thing for all of us. But before we get to that, let’s take a look at the new stats.

A new study from DailyWorth, which was reported on by Reuters shows that 76 percent of women are now their household’s main retirement planner. This means that more women are deciding where and how to invest retirement funds — and, where applicable, leaving the guys out of it. Compare this to a 1993 survey from the Employee Benefit Research Institute, which showed that over half of U.S. women at the time didn’t “feel prepared” for retirement, and it’s clear that women are stepping into the driver’s seat when it comes to financial planning, so to speak. What a difference two decades make.

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And, as Reuters also points out, women are accumulating a rapidly expanding cache of wealth — and our assets may reach $22 trillion by 2020 (this, as they note, makes us particularly appealing to investment advisors, for obvious reasons). Not only are women taking on a position of greater authority in terms of household cash (remember that women also make the bulk of the household purchasing decisions) — they’re also raking in more money. This is due to a variety of factors, including our increasing likelihood to take a place in the workforce (recent data from Catalyst shows that women 15 and older accounted for 47.3 percent of the workforce).

So, why is this a good thing for the economy? Can women — and more of us — in the investment world really change the economy? That may be the case — and it all comes down to personality.

While we’re not one to pigeonhole women, especially when it comes to personality, there are a few prevailing truths when it comes to women investors: We’re more cautious, less inclined to take risks and more likely to underestimate our own financial prowess. In short, women are a little more paranoid about financial peril. And the more ground-level investors (i.e. your average, everyday Jane) there are like that, the better.

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Consider Treasury Secretary Geithner’s harshly memorable depiction of the financial crisis this past April: “Most financial crises are caused by a mix of stupidity and greed and recklessness… you can’t legislate away stupidity and risk-taking and greed and recklessness.” Indeed, you can’t. But what you can do is incentivize people who aren’t risk-takers — and aren’t greedy or reckless — and get them into the game. (One only needs to see the story of MF Global to recognize how too many suits with too much money can go awry.)

On a micro-scale, more women making key financial decisions for their families could mean fewer investors taking on high-risk mortgages and fewer households overextending themselves when it comes to retirement. And all these things (household by household) add up.

So what are we to make of this? Yes, women are more likely to say they lack confidence when investing — and maybe that’s not such a bad thing.

Amy Tennery is the managing editor of The Jane Doughwhich provides news and insight on women in the business world and political arena. Tennery previously edited business news site Mogulite and was a reporter for the Real Deal, a New York City real estate trade publication. Her work has also appeared in the Washington Post, Slate and other publications.
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