Planning & The New Demographics

Understanding The Investing Habits and Challenges of Single Women

Retirement takes a backseat with nearly half of this population taking early withdrawals

New research from E-Trade examines changing attitudes about saving for retirement

March 16, 2020 — ARLINGTON, Va.–(BUSINESS WIRE)– E*TRADE Financial Corporation (NASDAQ: ETFC) today announced insights from its most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors.

As part of its Diversity in Financial Services Thought Leadership series, E*TRADE examines niche investor populations to create a more inclusive environment around personal finance and break down the barriers of taboo money conversations. In conjunction with Women’s History Month, E*TRADE analyzed trends among single female investors, a segment which is expected to make up almost half of the working female population between the ages of 25–44 in the next 10 years.1

Results show:

  • Single women show outsized interest in less conventional investments. Single females are more interested in marijuana securities (35%) blockchain and crypto-related securities (33%), and Environmental, Social, and Governance (ESG) investments (29%), compared to 26%, 24%, and 18% of the total population respectively. Almost two out of five single women (37%) are more likely to invest abroad than domestically, compared to 29% of the total population.
  • Many take early retirement withdrawals. More than two out of five single women (43%) have taken early withdrawals from their retirement accounts, compared to one third of the total population (33%). They’ve dipped into their retirement account for a large purchase (17%), a medical emergency (15%), unemployment (12%), or education costs (12%).
  • They show pronounced interest in emerging benefits. Single females are more likely to be interested in financial wellness benefits like student loan refinancing (24%) and education reimbursements (42%), compared to 17% and 34% of the total population, respectively.

“Many single people carry the financial burden of an entire household, which can make it difficult to prioritize and visualize long-term financial goals when you’re trying to stay above water on the day-to-day,” said Kerry McDermott, Senior Director of E*TRADE Advisor Services. “For those who are hesitant to get started, it bears repeating that it’s critical to create a foundation, however small. Over time, the power of compounding can help women build their wealth and put them on the path to financial security.”

About the Survey

This wave of the survey was conducted from January 1 to January 10 of 2020 among an online US sample of 907 self-directed active investors, composed of 121 single female investors, who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.20 percent at the 95 percent confidence level. It was fielded and administered by Dynata. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month), and passive (trade less than once a month). The panel is 60% male and 40% female, with an even distribution across online brokerages, geographic regions, and age bands.

Referenced Data:

In general, please rate your current interest in each of the following…

Total

Single Females

Blockchain and crypto-related securities

24%

33%

Marijuana securities

26%

35%

ESG investments

18%

29%

Real estate

43%

53%

Renewable resources

42%

52%

Payment stocks

38%

46%

I am more likely to invest abroad than domestically this quarter.

Total

Single Females

Agree (Top 2 Box)

29%

37%

Strong agree

10%

16%

Somewhat agree

19%

21%

Neither agree nor disagree

27%

30%

Somewhat disagree

29%

26%

Strongly disagree

15%

7%

Disagree (Bottom 2 Box)

44%

33%

Have you ever taken out money from an IRA or 401(k) before the age of 59.5 and, if so, for what?

Total

Single Females

No

67%

57%

Yes

33%

43%

Yes, to make a large purchase

12%

17%

Yes, because I became unemployed

11%

12%

Yes, to pay for education

8%

12%

Yes, for a medical emergency

8%

15%

Yes, to simply spend on myself or my family

6%

11%

Yes, to spend on a vacation

4%

6%

Which of the following benefits that a potential employer could provide would be the most important to you?

Total

Single Females

Retirement plans

82%

79%

Insurance other than health (e.g., life, legal, and auto)

63%

62%

Employer stock at a discount or bonus

48%

41%

Education reimbursement

34%

42%

Commuter benefits

24%

28%

Gym discounts

19%

17%

Student loan refinancing

17%

24%

Product discounts

12%

7%

 

 

 

About E*TRADE Financial and Important Notices
1. Morgan Stanley, “Rise of the SHEconomy,” Morgan Stanley, September 23, 2019. https://www.morganstanley.com/ideas/womens-impact-on-the-economy
Automatic Investment Plans and dollar-cost averaging do not ensure a profit or protect against a loss in declining markets.
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