A single choice could leave women $200,000 worse off in retirement savings. But is it a fair recommendation to encourage women to take more risks with their investments? Let's explore this intriguing topic.
Just 32 minutes ago, a financial revelation emerged: women are advised to embrace riskier KiwiSaver strategies to bridge the gender gap in their savings. Westpac revealed that while the gap has shrunk from 17% in 2020 to 14% in 2025, men still contribute and save more, despite women's longer average lifespan.
The disparity is evident across all age groups over 18 in Westpac KiwiSaver funds, with the most significant gap among 30 to 39-year-olds. Here, men boast an average balance of $28,992, while women lag behind at $21,740. Sarah Hearn, Westpac's general manager, attributes this to the gender pay gap, career breaks, and women's tendency to opt for less risky funds.
And this is where it gets controversial: men invest 37% of their balances in growth and high-growth funds, while women allocate only 32%. Women tend to favor moderate or conservative funds, which may hinder their long-term returns.
Aggressive funds have historically outperformed conservative ones, with an average annual return of 9.5% over 10 years, compared to 4.2%. Hearn warns that women's defensive strategies early on could result in a substantial loss of potential earnings over time.
Westpac's estimates are eye-opening: a conservative fund investor could miss out on over $225,000 compared to a growth fund investor over 30 years. Hearn suggests that women saving for the long term, at least 13 years, should consider riskier funds if they can tolerate the fluctuations in their balance.
Hearn encourages women to openly discuss their financial choices, as men tend to be more comfortable talking about money. She believes that engaging in conversations about KiwiSaver balances, returns, and fund types can empower women to make more informed decisions.
So, should women embrace riskier investments? Hearn advises assessing your risk tolerance and time horizon. While short-term volatility is expected, the long-term gains could be significant. It's a delicate balance between playing it safe and seizing opportunities.
What do you think? Is it time for women to take the plunge into riskier investments? Share your thoughts and let's spark a conversation about this financial dilemma.
