1 Facing Unique Financial Challenges Building on Unique Advantages Taking Action for Financial Success | NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | What Every Woman Should Know about Investing Today, we're going to talk about investing in a presentation that was especially designed for you as a woman. In the next 15 minutes we will discuss: • The unique challenges women face with their money and investments • The unique advantages women enjoy when it comes to money and investing • And how you can take action that can help you secure your financial future.
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Jan 12, 2015
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1
Facing Unique Financial Challenges
Building on Unique Advantages
Taking Action for Financial Success
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
What EveryWoman
Should Know
about
Investing
Today, we're going to talk about investing in a presentation that wasespecially designed for you as a woman. In the next 15 minutes we willdiscuss:
• The unique challenges women face with their money and investments
• The unique advantages women enjoy when it comes to money andinvesting
• And how you can take action that can help you secure your financialfuture.
2
CommonGoals,UniqueChallenges
2
Common Goals,
Unique Challenges
Women and men share the same financial goals. But they face differentfinancial challenges. Research shows that the genders also tend toapproach investing in different ways. That’s why we tailored thispresentation just for women.
3
Time Out
of the
Workforce
Results in:
Facing unique financial challenges
Source: Social Security Administration, 2004;U.S. Department of Labor; Institute for Women’s
Policy Research, 2005.
3
% of what men receivelower
pension
Social
Security
income
Women face some unique financial challenges, especially when itcomes to their working lives. The average woman spends 15% of hercareer years out of the paid workforce, which translates into:
• Lower pension coverage—women receive only about 1/2 of what menreceive in pension income and about 2/3 of what men receive fromSocial Security.
• Lower income—women earn only 76 cents for every dollar earned by aman.
4
Living Longer, More Savings Needed
Facing unique financial challenges
4
Source: Annuity 2000 Mortality Table, Society of Actuaries. Figures assume you are in good health.
male
age 65
female
age 65
couples
age 65
50% chance of living to 25% chance of living to
9488
9792
9285
50% chance of living to 25% chance of living to
at least one person has a 50% chance of living to
at least one person has
a 25% chance of living to
The average woman is likely to need to save more money for retirementbecause she can expect to live longer than the average man.
5
Facing unique financial challenges
Nine Out of Ten Women Will Be Solely
Responsible for Their Own Finances
Sources: National Center for Women and Retirement Research; U.S. Bureau of the Census, 2005.
5
Women are more likely than men to live alone in retirement.
• The average age of widowhood is 56.
• The divorce rate for first marriages is 50%, for second marriages it is60%.
• At some point in their lives, nine out of 10 women will be solelyresponsible for their own finances.
6
Greater
Health
Care
Needs
Healthcare costs and healthcare spending are
rising faster than the annual rate of inflation
4.3%
8.2%
2.8%
Facing unique financial challenges
Source: U.S. Bureau of Labor Statistics, 2005.
6
annual
inflationhealthcare
inflationhealthcare
spending
A woman’s healthcare needs are likely to be greater than a man’s sincewomen live longer. With healthcare costs rising faster than the annualrate of inflation—and healthcare spending rising even faster—it puts anadditional strain on a woman’s retirement savings.
7
Facing unique financial challenges
Women
Trail Men
on Investing
Knowledge
7
menwomen
Source: Matthew Greenwald & Associates Survey, July/August 2004.
investing
long-term
strategies
basic economicfacts
knowledgeable about
Women:
• Score lower than men on their knowledge of investing and how thefinancial markets work.
• Are less familiar than men with long-term strategies, such as dollarcost averaging.
• Are less likely to know basic economic facts, such as the historicalrate of inflation.
8
Investment returns for major asset
classes, 9/30/80-9/30/05
Facing unique financial challenges
Women
Invest More
Conservatively
8
Source: Lipper , 2005. This information is hypothetical and for
illustrative purposes only. It does not reflect any particularinvestment. Equity securities are more volatile than bonds
and subject to greater r isks. Bonds are subject to interestrate, pr ice and credit r isks. When interest rates r ise, bond
prices generally fall. Treasury bill return represented by theTreasury Bill 1-Year Index. Treasury bills are guaranteed by
the U.S. government and, if held to maturity, they offer afixed rate of return and fixed pr incipal value. Investment
grade bond return represented by the Lehman BrothersAggregate Bond Index; stock return represented by the
Standard & Poor’s 500 Index. It is not possible to investdirectly in an index.
Treasury bills
more risk,higher returns
12.8%
less risk,lower returns
Investmentgrade bonds
Common stocks
9.6%
6.1%
According to the National Center for Women and Retirement Research,women tend to invest more conservatively than men. They tend to favorfixed income securities that are less likely to keep up with inflation overtime. They tend to shy away from more aggressive investments that aremore risky, but also have the potential for higher returns.
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Advantage:
Women
Building on unique advantages
9
menwomen
have a
financial
strategy
make impulsive
decisions
find it hard to
admit mistakes
Source: Matthew Greenwald & Associates Survey, 2004.
more likely to
However, women exhibit behavior that can be advantageous in achievinginvestment success.
• Women are more likely to have a formal financial strategy.
• They are less likely to make impulsive decisions that turn out poorly.
• And when they do make a mistake, they find it easier to let go.
10
Women
Gaining
Ground
Building on unique advantages
Source: Investment Company Institute, Profile of Mutual FundShareholders, 1996 and 2004.
10
More women involved in
investment decisions
21%
56%1996
2004
% of women as co-decision maker
Women have also made great strides in their role as investmentdecision maker.
• Take a look at this bar chart. It shows that the percentage ofhouseholds in which women share responsibility for investmentdecision making has more than doubled over the past nine years—from21% in 1996 to 56% in 2004.
• The data is based on an annual survey of U.S. households that ownmutual funds.
11
Taking action for financial success
11
1 Establish good credit
2 Join employer tax-deferred retirement plan
3 Invest regularly
4 Create a financial strategy
5 Work with a financial professional
Five Steps Toward
Financial Success
What can you do to put these unique advantages to work to secure yourfinancial future? Here are five steps you can take now.
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Establish
Good Credit
in Your Own
Name
Taking action for financial success
• Credit card in your name
• Checking or savings account
in your name only
12
Step number one. Whether you are single or married, working in or outof the home, it’s essential to establish credit in your own name andmaintain good credit. You can do this by having at least one credit card inyour name and paying your balance on time. It’s also a good idea tomaintain a checking or savings account in your name.
13
Taking action for financial success
13
Source: Thomson Financial, calculated by BlackRock, 2005. This information ishypothetical and for illustrative purposes only. It does not reflect any particular
investment. Generally, mutual funds do not offer a fixed rate of return. An investor’spr incipal is not guaranteed or protected from decline. The growth of your assets will
be based on an actual rate of return provided by the investment you choose.
• Tax-deferral
• Matching funds
Join Your
Employer’s
Retirement
Plan
Even if you are just out of college, you will need to begin to save now forretirement. Many employers offer to match the money you set aside.The most common match is 50 cents for every dollar you contribute, upto 6% of your pay. Don’t pass it by. In your employer’s plan, retirementsavings compound more quickly because they can grow tax-deferred.Contributions you make may also reduce current income tax.
14
Taking action for financial success
Source: Thomson Financial, 2005. A fund’s share pr ice, yield and return will fluctuate and you may have a gain or loss when you sell
your shares. This information is hypothetical and for illustrative purposes only. It does not reflect any particular investment.
14
Invest
Regularly;
Start
Today
If you begin investing a regular amount in your employer’s tax-deferredretirement plan or in an IRA, and your money grows tax-deferred at anannual rate of 7%, you can build a substantial nest egg over the next 10to 20 years, as this chart shows. You can accumulate more than$102,000 for retirement by investing just $200 a month, if yourinvestments earn 7% annually. With a higher amount of savings youcould accumulate substantially more for retirement.
15
Taking action for financial success
15
•Save regularly
•Allocate your assets
•Choose your investments
•Monitor and rebalance your portfolio
Create a Financial Strategy
It’s a lot easier to reach your goals if you have a strategy that includes:
• Regular savings
• Asset allocation that shows how to divide your investments amongdifferent types of funds
• Specific investments
• Monitoring and rebalancing your portfolio to keep it on track
16
Indices used in this seminar
16
The Lehman Brothers U.S. Aggregate Bond Index is an unmanaged index
composed of more than 5,000 investment-grade taxable bonds.
The Standard & Poor’s 500® Index is composed of selected common stocks,
most of which are listed on the New York Stock Exchange, and is focused on
the large cap segment of the market, with over 80% coverage of U.S.
equities.
Treasury Bill 1-Year Index includes one-year instruments. The index is
derived from secondary market interest rates as published by the Federal
Reserve Bank in release H.15 (519).
Indices used in thisseminar
17
Taking action for financial success
17
BlackRock Distr ibutors, Inc. is the distr ibutor of 50 mutual funds.
800-882-0052 | www.blackrock.com
and can help
You should consider the investment objectives, risks, charges and expenses of
the fund(s) carefully before investing. For complete information about any of
the BlackRock funds, including objectives, risks, charges and expenses, you may
obtain a prospectus from BlackRock Distributors, Inc., 760 Moore Road, King of
Prussia, PA 19406. 800-882-0052. Please read the prospectus carefully before
you invest or send money.
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Print Seminar and Speaker Notes
Work with a Financial Professional to
Take Charge of your Financial
Future…
With so much riding on financial strategy, most investors choose towork with a financial professional. In fact, one reason that women arereported to be more likely to have a financial strategy is that they aremore likely to have a primary financial advisor. When you work with anadvisor, you gain access to professional knowledge, expertise and advice.Your advisor can help you take action—and take charge of your financialfuture.
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