Phillipa Healy, Senior Vice President:At PIMCO when we think about retirement, we're really laser focused on retirement income and how investors can particularly sustain an income stream. Libby, at the Harris Poll, you've conducted some great research that really speaks more broadly than being specifically investor focused on women investors, and almost measures that broader sentiment that women may have toward retirement. Could you share some of those insights that you have perhaps around attitudes and lifestyle for women beyond investing?
Libby Rodney, Chief Strategy Officer, The Harris Poll:Yeah. I think there's a really exciting story to be shared. In fact, women think that retirement is going to be the most liberating phase of their life. And I think a lot of it has to do with as they age, they get to focus more on themselves.
Chart: The three donut charts represent a breakdown of the top three personal goals for women and retirement: improve health and wellness (57%), travel and/or live abroad (37%) and financial independence (35%).
And as they focus on themselves, they're prioritizing three things. Their wellness, travel and living board, and then the most important, right, is being financially independent. And having those three things really creates how they consider their — their full package going into retirement.
But as they kind of shift optimistically into the future, they're also just doing things differently than maybe their parents had during retirement, and they actually plan on working during retirement. We call them the un-retirees. And that's 4 in 10 women who are working during retirement, but don't financially have to work.
Shots of retired women working and volunteering.
So they're working for their passions, they're working for social engagement; they're working to give back to the community. And we actually see that 1 in 5 women are planning to start businesses after they're retired as well. So they plan to live this huge, fulfilling second chapter. And I think that's really reimagining what retirement looks like in the future, which is exciting.
Phillipa Healy, Senior Vice President:Yeah, it is. I mean, Christine, in hearing that and knowing from a PIMCO perspective and research that we've also conducted, where are some of the barriers that women can face when looking at retirement.
Christine Long, Executive Vice President:I think one of the interesting things that we learned, when we dig deeper into some of the areas that we explored with women, only 17 percent listed retirement as a top financial goal.
You know, there are barriers when it comes to women accumulating wealth.
Chart: The chart breaks down three unique challenges for women in their lifetimes: earning potential (time value of money), career interruptions (limit lifetime earnings) and longer life expectancy (increased estimation of support in retirement).
For every dollar that a man earns, women are earning 84 cents on the dollar. There are oftentimes breaks in career, whether to care for children or an ill family member. And of course now layer on top of that the longer life expectancy for women.
That wage gap is real. And it compounds over time. In fact, that wage gap can amount to more than a million dollars at retirement for women. So accumulating a million dollars less of wealth for retirement, and then faced with a much greater healthcare costs, and a larger bill for healthcare because of that longevity that they're experiencing.
Phillipa:So what are some of the things that PIMCO's doing to help with that?
Christine:So one of the other opportunities that we uncovered through the research is that we need to do a better job as an industry in simplifying our messaging and our communications around investing.
Chart: The chart breaks down how women perceive investing. 72% of women believe the system is set up to be confusing and 51% of women feel they need to become experts to talk to an advisor.
Many women told us that they feel like they need to be an expert just to go talk to a financial advisor.
Text on screen: The What, Why, and How of Investing:
Helps demistify the complexity of retirement investing and gives investors the tools they need to confidently discuss retirement
And so we created a series of educational primers called the “What, Why, and How of Investing”, that is just intended to demystify some of the jargon that we use, and really equip not only women, but any investor, with enough knowledge to go and comfortably have a conversation with a financial professional.
Libby:In research we kept seeing over and over women felt that it was super complex and hard to get around, yet they think it's going to be the most liberating phase of their life. So this kind of step by step of getting there allows them to get to that process of liberation, and excitement, and all these kind of big goals that they have for that really fulfilling second chapter.
Phillipa:Yeah, absolutely. Well thank you so much both of you for your time today. And for anyone interested in accessing the “What, Why, and How of Investing”, which Christine mentioned, please visit PIMCO's website.
For more insights and information visit pimco.com/diverse-perspectives
Recorded 04 February 2020
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