Tuesday, November 28, 2017

Some Women Attain an Enviable Status: 401(k) Millionaire

Credit Robert Neubecker
Accumulating $1 million in retirement savings is symbolic, even if it means different things to different people.
It represents an aspirational amount of wealth to some, financial security to others or a milestone on the way to greater savings still. Of course, in a nation where 44 percent of the population does not have $400 saved for an emergency expense, reaching $1 million may seem unimaginable.
For a small but growing number of working women, however, it has become a reality.
Over the last 12 years, the share of women who have amassed sums of $1 million or more in their retirement plans has doubled, according to research conducted by the investment firm Fidelity, based on the 15 million participants in the 401(k) accounts it oversees. About 20 percent of its 401(k) millionaires were women as of the end of September, the firm found, up from just under 10 percent in the same period in 2005.
“Part of it is that we’ve seen more women actively participating in 401(k) plans and contributing more,” said Jeanne Thompson, a senior vice president at Fidelity Investments, who conducted the study. The firm said 133,000 people on its platform have achieved 401(k) millionaire status.
Financial professionals who work with women say they are not surprised that more women have crossed this threshold, particularly as more women understand the challenges they face. Women earn less than men but live longer and often spend more years out of the work force caring for young children or elderly parents.
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“When I first started in the financial services industry 25 years ago, I noticed male colleagues would often share ideas and thoughts about investing and planning for retirement with each other but women really didn’t,” said Manisha Thakor, director of wealth strategies for women at Buckingham Strategic Wealth.
“In the intervening two and a half decades, we’ve seen the dramatic rise of female co- and primary breadwinners and, concurrently, the adoption of the ‘this is information I need to know to protect my family’ mind-set amongst women,” she added.
So what can we learn from these women who have achieved millionaire status, particularly those who managed to get there on not-so-stratospheric salaries of, say, less than $150,000?
Contrary to stereotypes that women are more risk-averse, women who achieved millionaire status — and who earned less than $150,000 — are investing in stocks in a similar fashion to men: They held about 77 percent of their savings in stocks, on average, versus 76 percent held by their male counterparts. So they have clearly been helped by the growth in the stock market.
And by several measures, significant differences between the sexes fade when income is no longer a distinguishing factor. Among the 401(k) millionaires earning less than $150,000, women earn $117,000, on average, compared with $118,800 for men. Both genders have earned similar rates of return on their money — and they have been working and saving somewhere in the neighborhood of three decades.
Both men and women also tend to cross the 401(k) millionaire threshold after they hit 50, though women take a slight lead: The average age is 58.5 for women, 59.3 for men. Women may have an advantage because of their behavior. “The biggest difference is that women are saving more,” Ms. Thompson said.
Indeed, women who earn less than $150,000 and have attained 401(k) millionaire status are saving 18.1 percent of their salaries, on average. That amount is complemented by a 6.8 percent employer contribution, for a total of 24.9 percent, or roughly twice as much as women over all. Men, meanwhile, save 22.8 percent total, including the employer match.
The analysis did not track whether these women were always superstar savers, squirreling away disproportionately more than average, or how their behavior may have changed over time. Workers do tend to save more, however, as they get closer to retirement (Millennial savers at Fidelity, who are in their 20s and 30s, for instance, save an average of 10.2 percent; Gen Xers (late 30s to early 50s) save an average of 11.7 percent).
Given the women millionaires’ ability to accumulate such large sums, we can reasonably assume that a fair bit of good fortune played a role.
These women have been gainfully employed over long stretches of time — in fact, that’s why Fidelity was able to study their behavior. It’s probably also safe to assume if they had a Fidelity 401(k), they also had decent health insurance. Because they have been employed and saving, they have seemingly been able to weather financial challenges, whether it was a plunging home value in the depths of the housing crisis or, perhaps, an expensive divorce.
We do not know how many of these millionaire women were also mothers, but it also seems reasonable to infer that they probably had enough household income to cover child care — or family help — so they could continue working for 31 years, on average — with little interruption.
Not all women have that privilege, and there is a lot that needs to go right to be a successful saver. That’s why Sallie Krawcheck, a former Wall Street executive who held several prominent positions before opening Ellevest, an online investing platform for women, suggests that woman get started early.
“Our research further shows that ‘the biggest investing mistake women make’ is not overtrading or chasing last year’s winners or falling in love with a stock,” Ms. Krawcheck said. “It’s not getting started soon enough and not making it a habit.”
To achieve millionaire status on a relatively modest income, consider the following 25-year-old worker with a starting salary of $40,000, which grows by 1.5 percent a year. To accumulate $1 million, she would need to save 23 percent of her paycheck — including any employer match — until she retires at age 65 (with an ending salary of nearly $74,000), according to Fidelity’s calculations. That assumes her portfolio grows 3 percent annually, not including inflation.
She could reach that milestone by saving a total of 16 percent annually if her portfolio earned 4.5 percent, also excluding inflation.
“It’s more about the continuity of the savings rate and investing for growth over the long term,” Ms. Thompson said.
Accumulating large sums is obviously far easier with a higher income — the average 401(k) millionaire women earn $287,700, while men generate $354,600 annually.
And despite its symbolism, $1 million is not the right number for everyone. A credentialed financial planner (who puts clients’ interests first) would take a close look at your current cash flow and expenses, make some assumptions and come up with a personalized figure for your life circumstances and goals.
But if you’re looking for a broad rule of thumb, which can serve as an (overly general) guidepost, consider this: For people earning $50,000 to $300,000, Fidelity suggests they end up with 10 times their last annual income and investing at least half their savings in stocks over the long haul. In other words, those who end their careers earning $100,000 are estimated to need $1 million.
The firm estimates that will put retirees on track to replace 45 percent of their income, with Social Security providing the rest, assuming Congress strengthens the program and does not make cuts that diminish it.
Despite the progress by women, men still make up the vast majority of workers with the largest account balances — and it is hard to know when women will reach parity.
It probably traces back to uneven income levels. In the Fidelity 401(k) universe alone, for instance, the average male participant earns $113,100 compared with the average female, earning $80,600. Adding to the disparity is the fact that some women carry a disproportionate amount of responsibility at work and home.
“Many women don’t have continuous career paths, they are more likely to take time off from the work force, step out for a year or two, and/or may work part time at different points in their careers,” Ms. Thompson said. “These moves can all impact their long-term savings.”
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Opening 30 November 2017, 8 p.m.

Guy Bourdin, Charles Jourdan, 1975, © Guy Bourdin Estate, 2017, courtesy Louise Alexander Gallery
As of December 1st, 2017 the Berlin-based Helmut Newton Foundation will present its new exhibition Guy Bourdin. Image Maker / Helmut Newton. A Gun for Hire / Angelo Marino. Another Story.
Guy Bourdin revolutionized fashion photography in the late 20th century, similar to Helmut Newton. Both were the star photographers of Vogue Paris and produced some of the most iconic images of that era working for the top international fashion houses. While their medium was the magazine, they approached it with avant-garde point of view and sharp humour. Unique as they were, they both broke aesthetic conventions achieving a sense of timeless glamour in their editorials and advertising and independently of one another developing a sense of “radical chic.”
In 1970s at the peak of their career while they photographed magazine editorials, Newton shot the collections of clients such as Chanel, Yves Saint Laurent, Thierry Mugler, Mario Valentino and Blumarine. Simultaneously, Bourdin photographed collections such as Versace, Ungaro, Chloe, Chanel and Yves Saint Laurent while in addition he found a prime client in Charles Jourdan, the French shoe brand, that lasted over 15 years.
Now, for the first time ever Helmut Newton Foundation will showcase the iconic works by these two influential fashion photographers with an extensive exhibition in Berlin to celebrate their visionary artistic contribution and their enduring legacy.
Newton called himself in self-irony “A Gun for Hire,” a term then used for the title of the exhibition of his commissioned work shown posthumously in 2005 in Monaco and Berlin and later in Budapest. A selection of this project will now be shown again at the Helmut Newton Foundation – for the first time juxtaposed with the works of his notable French colleague, Guy Bourdin.
Guy Bourdin was a painter all his life and an auto-didact photographer; his career spanned over three decades since his debut editorial in 1955. He was also an instinctive Surrealist, a creator of enigmatic narratives and a sophisticated art director. He extended the possibilities of what a fashion photograph might be by creating images that were, cinematic and unforgettable with intense interplay of light and shadow, hyper real colors and tight composition.
Entitled “Image Maker” the exhibition introduces works by Guy Bourdin from various publications, iconic and lesser-known images, Vintage prints, Vogue Paris layouts alongside his visionary advertising for Charles Jourdan shoes. Both formally and contextually Bourdin presented shoes and other fashion products in challenging ways, by mainly using it as double spreads that resound today modern beyond their commercial context.

Helmut Newton, Thierry Mugler, Milan 1998, © Helmut Newton Estate Gallery
In Helmut Newton’s “A Gun for Hire” we can see commissions for fashion designers from the 1990s that were first published in their own fashion books, and later often shown by the photographer as part of his own oeuvre. It was never merely a fashion shoot which he produced, but also an unexpected, complex story, tinged with the suspense of an Alfred Hitchcock film – without forsaking the autonomy of the image. We encounter similar visual approach in the works of Bourdin. For Both, it is often unclear where reality ends and the staging begins; in this fantasy universe that they created, everything seems real and surreal at the same time, and occasionally bathed in a dreamlike cinematographic light.
In his later fashion and product shots Newton often staged photographic sequences, such as the black-and-white visual narrative for Villeroy & Boch (1985), a series of single images for Absolut Vodka (1995), a series with the model Monica Bellucci in different dresses by Blumarine (1998), and his 12 motifs with bikini models for a sports magazine calendar (2002).

Angelo Marino, Another Story, Week 7, Eze sur Mer, 2014, © Angelo Marino
Small and intimate, “June’s Room” is reserved for friends and colleagues of the Newtons – and this time for Helmut Newton’s former assistant Angelo Marino, who has gone on to work with Newton’s widow June (a.k.a. Alice Springs). Complementing the works of Bourdin and Newton, Marino presents under the title “Another Story” an eclectic view of his immediate environment, which he photographed on the way from his home in Cannes to his workplace in Monte Carlo. The snapshot-like images, taken with his iPhone, capture fellow travelers, the sea, or views of architecture and the landscape rushing past the window of the train. The show comprises a collection of 52 panels, each consisting of five color photographs arranged in a tableau representing one week.
Tuesday, Wednesday, Friday, Saturday, Sunday 11 a.m. – 7 p.m.
Thursday 11 a.m. – 8 p.m.
10 € / 5 € concessions
every Sunday 4 p.m.
phone +49 30 266 42 42 42
fax +49 30 266 42 22 90
Once in a quarter on Thursday at 6 p.m. curator‘s tour at the Museum of Photography (with both institutions) and C/O Berlin, meeting point lobby of C/O Berlin.
Special guided tours on demand.
On the occasion of the exhibition the book “Guy Bourdin. Image Maker”, with an introduction by Shelly Verthime (curator of the Guy Bourdin Estate) and a text by Matthias Harder (curator of the Helmut Newton Foundation), has been published by Assouline, Paris / New York; 10 x 13 in – 25.4 x 33 cm, 260 pages, over 150 photographs, 4 illustrations, hardcover, ISBN: 9781614286356, $150 – €150 – £110