Reuters Money

With few female angel investors, signs of change

In the traditionally male world of angel investing, Ed Reitler is used to having his voice heard. A partner in Reitler Kailas & Rosenblatt LLC of New York City, he’s also the founder of the ARC Angel Fund, a New York-based investing launched in 2010. So when he says that it’s “incredibly important” to develop female angel investors because “they are crucial to ensuring the funding of a more diverse group of companies,” you’d hope his male counterparts would take notice.

After all, Reitler’s got a point. A 2006 report by the Ewing Marion Kauffman Foundation on women and angel investing concluded that “women entrepreneurs gravitate to women angels,” and that those benefactors “look at more women’s start-up businesses than some of the more traditional [male] groups do.”

That also explains why Reiter serves as a male mentor to the Pipeline Fellowship, a group that trains women to become angel investors through education, mentoring and practice. Its young founder and CEO, Natalia Oberti Noguera, is a lady on a mission: to change the lopsided ratio of male-to-female angel investors, and get female angels involved in finding and supporting female entrepreneurs.

In a new report from the Center for Venture Research at the University of New Hampshire, author Jeffrey Sohl outlines how women represent just 12 percent of all angel investors, and women-owned ventures account for 12 percent of entrepreneurs seeking angel capital. Of these ventures, about one in four received angel investment during the first two quarters on 2011.

Low as those numbers look, they were actually higher in 2010, when 13 percent of angels were female, and women-owned ventures accounted for 21 percent of entrepreneurs seeking angel capital.

Less than two weeks after the Center for Venture Research released its findings, Oberti Noguera hosted an event in New York City on Oct. 20 to announce that Pipeline’s 2011 fellows would invest $50,000 in PhilanTech. Based in Washington, D.C., the company produces an online grants management system for foundations, nonprofits and corporations.

Combined with another $55,000 from the Pipeline Angels alumni network, that means $105,000 in fresh capital for a company that had struggled to gain investment traction — even though PhilanTech’s founder, Dahna Goldstein, was lauded by Bloomberg Businessweek as one of 2009’s most promising social entrepreneurs.

Divorce stress meets recession mess, and women struggle

When Carol Meerschaert of Paoli, Pennsylvania divorced 10 years ago, she experienced first-hand how starting over as a single mom also means managing the money without any help.

Her kids were 7, 10 and 14, and even though she had income as a dietician, “it certainly was very challenging,” Meerschaert recalls. She moved into a smaller home, paid her own mortgage and, in time, funded college tuition for her eldest daughter.

“She had to drop out of school for a year — a school she loved,” Meerschaert says. “I went back to school, too, to get an MBA so I could make more money.” She never lost her house, or her nerve. But other woman aren’t so lucky.

Experts say alarming numbers of women emerge from divorce lacking even the most basic money management skills, to the point where many begin single life as financially illiterate. Meanwhile, the serpentine economy of 2011 has only placed added strain on unhappy couples and divorced women.

A new study by the University of Virginia’s National Marriage Project found that divorce rates have followed the fall and rise of the nation’s troubled economy during the last four years. Between 2008 and 2009, divorce rates dropped significantly as families experienced unemployment and mortgage stress. In 2008, the divorce rate fell 24 percent, and in 2009, 57 percent. The rate is on the rise, however, as the nation slowly recovers from the recession.

“The current economic climate has certainly added more complications to the divorce process,” says Linda Lea Viken, president of the American Academy of Matrimonial Lawyers.

Viken cites a new survey where 85 percent of the organization’s members reported a jump in divorce settlement difficulties since 2008 due to housing debt. That, in turn has impacted child custody cases due to relocation issues, 53 percent of members reported.

Women hand over the reins on retirement: survey

You’ve heard the statistics: More women than ever are involved in household finances, with a quarter of them in control. Working women have surpassed men in attainment of higher education — the first time in history.  And yet, women still pass the buck when it comes to their own retirement security, according to a new survey from ING Direct USA and Dailyworth.com.

• Among those surveyed, nearly 40 percent of married women will leave their retirement planning up to their spouse or significant other
• Nearly 30 percent say they have no idea what their main source of retirement income will be

More than 1,000 Americans over the age of 18 participated in the phone survey — the majority of women had some form of higher education (63 percent) owned their own home (74 percent) and considered themselves the head of the household (52 percent).

Why are smart, working women surrendering their own retirement planning? The answer may lie in their self-description — nearly two-thirds (65 percent) of the women surveyed categorized themselves as “traditional” as opposed to “modern.”

“We had anticipated that women would identify themselves as modern and give some excuse for not investing, but when we saw the traditional designation for how they perceive themselves, that set the stage for the other answers that we found, which were surprising given our initial concept,” says Cathy MacFarlane, head of corporate relations for ING Direct USA.

This pervasiveness of antiquated definitions of male and female roles continue to play out in the financial services industry, advisers say.

“Most of the clients that we work with still operate under traditional gender roles. In certain households day to day operations fall under the wife’s supervision and financial matters tend to fall under the male supervision. That’s not always the case, but it seems to be the way things break down more often than not,” says Ben Birken, a certified financial planner with Woodward Financial.

We’ve come a long way, baby — but we have far to go

Lara Pingue is a Personal Finance producer for Reuters.com. The opinions expressed here are her own.

A coworker recently sent me a YouTube video of a 5-year-old girl declaring to the world her intention to get a job before she gets married. It’s a funny clip, filled with the kind of urgency and drama only a pre-teen girl can muster. But something about it made me uneasy: Isn’t getting a job before marriage a given? Since when is this decision worth broadcasting on the Internet?

It seemed fitting that this video would go viral in time for International Women’s Day, a time to look back on just how far we women have come. Fifty years ago, would it surprise anyone if a little girl talked about landing a husband – not a job – right out of high school or college?

I’m grateful times have changed for most of us, but we can’t be smug. Yes, women are making impressive strides in the workplace. And yes, we’re juggling it all: marriage, kids, career and dazzling social lives. But a recent White House report on the state of women in America is a wake-up call for anyone who thinks the struggle is over.

Consider this: after all the fighting for gender equality, women are still earning 75 percent as much as their male counterparts in 2009, the White House report finds. And women’s career choices are partly to blame: we’re still working as secretaries, nurses, teachers and cashiers more than men, who are busy launching careers in science, technology and financial services – careers that pay serious cash.

And guess what else? When times get tough, women – not men — are more likely to bear the brunt of it.  In 2009, 28 percent of working women who were unmarried with children had incomes below the poverty level, compared to only six percent of male workers.

Women’s health is another cause for concern. While it’s true that women outlive men, the gap is narrowing. More alarming, women are more likely to suffer chronic conditions such as asthma, depression, arthritis and emphysema.

Women in America: How far have we come?

American women are making headway in employment and college education, but the nagging pay-gap still exists, a new White House report finds.

The White House today kicked off Women’s History Month with a report on the status of women in America, the first comprehensive overview of its kind since 1963.  The report is intended to be a “guidepost” for moving forward on everything from closing the salary gap to health issues directly affecting women, says Valerie Jarrett, chair of the White House Council on Women and Girls.

“These aren’t just women’s issues,”  Jarrett said in a conference call. “When women earn less than men, it affects the family. When there’s no affordable childcare, it affects the children.”

The study, which highlighted areas including income, family and crime against women, found that women aren’t just getting a better education, but they’re putting off marriage and having fewer children as a result of their career choices.

“One of the things I find most striking is how much traditional roles have changed,” says Becky Blank, acting deputy secretary at the Department of Commerce. But not everything has changed. Despite the rising ranks of women in the workforce,they still do more of the household work than men do, the report found.

Among the key findings:

Do you ever worry about ending up old and poor?

Manisha Thakor is the founder of Women’s Financial Literacy Initiative where she writes, speaks and teaches about personal finance for working women. The opinions expressed here are her own.

For many women, becoming the proverbial “bag lady under the bridge” is one of their worst nightmares. Myself included. I literally sit down with my husband and our financial planner twice a year to re-confirm that we are doing everything we can to make sure we do not outlive our retirement savings!

Unfortunately, this fear of ending up old and poor is actually a very rational one for a high percentage of women.

Recently, I had the chance to hear Karen Wimbish, Head of Wells Fargo Retail Retirement Group, and personal finance guru Jean Chatzky present powerful data collected in a Harris Interactive poll in conjunction with the launch of a new website to help women prepare for retirement, Beyond Today. I’m always looking for useful resources to direct women to, and I think this site can help a lot of folks.

First up, the data: (Put your seat belts on. The numbers are stark.)

• Nearly one-third of women between the ages of 40 and 69 “can’t estimate” how much money they can withdraw annually from their retirement accounts and about 32 percent of women in their 40s and 50s estimate they will withdraw between 11 percent – 30 percent of their savings annually.   These are unrealistically high annual withdrawal rates – leaving them vulnerable to outliving their savings.
• While both men and women are under-saved for their retirements, the women polled had saved less than men –  with a median retirement savings accumulated to date of $20,000 for women surveyed versus $25,000 for men.
• Worse still, despite longer expected life spans, when asked how much they were aiming for in retirement savings women aimed lower with a median goal of $200,000 versus $400,000 for men.

A savvy, 30-year industry veteran, Karen was kind enough to speak with me about some of the  factors driving this dreary data –- and what women can do to improve the odds that their golden years really will be golden.

Wells Fargo: Women don’t save enough for retirement

It’s retirement survey season. Since the Reuters personal finance team began tracking research on personal finance topics at the start of the year, more than 20 studies have hit our inboxes. Some common themes are starting to emerge: investors are risk-adverse; women are too conservative when it comes to retirement savings; and Americans are financially stressed, so much so that they are even lying to their spouses.

Following a study released last December, the latest installment of retirement research from Wells Fargo focuses on middle-class women. The survey, conducted by Harris Interactive last fall and released on Feb. 2, queried middle-class women across five decades, from those in their mid-20s to those who are already retired and in their 60s. Just 54 percent of women say they are confident they will have enough saved to “live the life they want” in retirement. By contrast, 62 percent of men are confident about their retirement goals.

Karen Wimbish, head of retail retirement for Wells Fargo, discussed the findings with Reuters.

What is most surprising about this study? Women are a lot closer to parity in the professional and business world. We represent almost 50 percent of the workforce and have a greater standing in professional jobs. Plus, 35 percent of women in the workforce are college graduates. And three out of five college students are women. But we are definitely two steps back and one step to the left of men when it comes to retirement.

In our study, women estimate they need for $200,000 for retirement, while men say they need $400,000. There’s already a problem because women are going to live longer. This isn’t part of our study, but 75 percent of nursing home residents today are women. Women get a smaller percentage of Social Security benefits than men. They are already behind in terms of guaranteed income. They are underestimating what they need in retirement.

What is shocking about the research? When you look at women aged 40 to 69 –- these are women who should be starting to think about retirement; retirement is knocking at their door; or they are in retirement –- 30 percent said they couldn’t estimate how much they will need to withdrawal from retirement savings annually. They either hadn’t thought about it or didn’t know. That’s head-in-the-sand behavior.

When we looked at women in their 40s and 50s, and asked them how much they need to take out when they retire, 32 percent said they planned to withdrawal 11 percent to more than 30 percent of their retirement savings every year.

Women outlive men, but don’t plan for it

Half of American women will live past age 85, but almost none of them are planning for it. You can count on it, because the actuaries say so.

A new study from the Society of Actuaries (SOA) finds that 92 percent of female retirees, and 89 percent of pre-retirees, haven’t done the financial planning necessary to live comfortably for their full lifespan. Women outlive men by an average of four years (see chart), so they have a critical need to plan for inflation, health expenses and long-term care needs. The study notes that inflation averaged 3.5 percent from 1980 to 2009; medical inflation — which affects seniors disproportionately — averaged 5.8 percent over the same period.

“Inflation is a greater risk for those who live longer,” says Anna Rappaport, one of the actuaries who wrote the report for SOA. “Women also tend to need more resources for long-term care. Their greater longevity means they tend to be ill for longer periods, and they’re less likely to have a family member available to care for them.”

How can women diminish the risk of outliving their resources? Rappaport recommends that they focus on:

Social Security. “Four in ten elderly women will rely exclusively on Social Security. It’s everything for so many of them.”

Working longer. “Many think they can solve the problem by working longer, but four in ten will retire earlier than they planned due to a job loss, illness or the need to provide care to another family member. You can’t count on it.”

Women can invest smarter

This post is by Nanette Byrnes, editor of Portfolioist.com

Women do invest differently from men, says Manisha Thakor. They have some inherent advantages — including a skeptical tendency to ask questions about investment ideas they don’t understand, and a tendency to gravitate toward “buy and hold” investing that saves on the trading cost of higher churn.

Still, as a group, women are way behind where they should be financially, says Thakor, a Harvard MBA who gave up a successful 15-year career on Wall Street to launch a second career as an expert on women and money.  She’s written two books on the subject and founded the Women’s Financial Literacy Initiative,  which is now offering an online financial course taught by Thakor.

It’s well known that women work fewer years over their lifespan, earn less for their work, and live longer than men. Here are some of the other unpleasant realities of female finances today:

* Women start to save for retirement on average 2 years later than men according to TransAmerica’s Center for Retirement Studies – which shaves off a remarkable 15% of their retirement nest egg over the life of an average career. *

* Fewer women with a 401(k) option participate (70% of women v. 82% of men) and those who do, contribute less (6% v. 7% by men), according to the same study. Also: fewer women save for retirement independently.

* The majority of female executives — 62% — fear they won’t have enough money to retire, according to a separate MetLife study.

Will women save more than men?

Women are ramping up their efforts to meet financial goals in 2011 and feel more hopeful about the economic outlook, but they’re still less certain than men are in their ability to actually meet those goals, a survey from TD Ameritrade shows.

Sixty-eight percent of women said they resolve to save more money in 2011, a steady climb from 66 percent in 2010 and 60 percent in 2009. Only 62 percent of men plan to do the same thing next year.

So what accounts for the difference? “I think women really tend to give more of themselves than men do. They seem to know that saving is in the best interest of their families and they want to make sure their families are taken care of,” offers Nicole Sherrod, managing director at TD Ameritrade.

Their shaky confidence may have to do with their financial positions: of those who said they were less likely to make a financial New Year’s resolution this year than last year, only 29% of women said they were in a better financial situation this year compared to 50% of men.

This might not come as surprise, given the gender-gap that still exists: women in full-time wage and salary jobs still earn only 80% of what men do, according to U.S. Department of Labor. (The figure rises to 93% among young workers aged 16-24.)