How is life in Marietta
Marietta Babos: "Being able to lead a financially self-determined life is a precious commodity"
DAMENSACHE.AT founder Marietta Babos has set herself the goal of strengthening all three pillars of provision. She says: Active investment is the key to financial independence - a particularly important topic for women.
How did you start dealing with women and investment?
Marietta Babos, founder of DAMENSACHE.AT: I worked for a long time in top management consulting and did my doctorate at the University of St. Gallen in Switzerland, in the Banking & Finance faculty. When my father suddenly passed away, my widowed mother received so little pension that, after taking into account her fixed monthly costs, she would only have had three euros a day at her disposal. I was very concerned about that personally and I found out that it is a systemic phenomenon. To change that, I launched the independent DAMENSACHE.AT initiative in 2018. It is my mission to educate women about financial and retirement provision and to motivate them to make provisions in good time so that they can lead a financially self-determined life at any age. The Austrian pension system is a three-pillar model, consisting of state, company and private provision. That is why I am involved in working groups dealing with state old-age pensions. Second, I often give lectures at companies at the invitation of board members and works councils, as part of the company pension offer for their employees. Thirdly, I explain the possibilities of private provision in the context of free webinars and consultations, together with my team that is active throughout Austria.
"My goal is to achieve that we women deal more consciously with financial independence."
What is the objective of DAMENSACHE.AT?
I think that being able to lead a financially self-determined life is a precious good that I wish everyone. As a general fact, we women should take specific provisions and cover ourselves with regard to our employment history and life expectancy. My goal is to achieve that we women deal more consciously with financial independence. We recommend forms of investment that best suit personal goals, individual life and income situation, willingness to take risks and the moral principles, keyword sustainability.
The recommendations from DAMENSACHE.AT also apply to men several times. But why are women especially hard hit when it comes to private provision?
Women often have different employment histories (see graphic) - not only because according to the statistics men earn more. Women continue to take care of the household and raise their children more and work part-time more often and for longer, which is massively reflected in the amount of pensions. In addition, the divorce rate in Vienna alone is over 40 percent, and many do not even marry. In addition, statistically speaking, women live five years longer. I therefore often joke that it is strategically smart to find a partner who is five years younger than you. The fact is that most women have to finance the last ten years of their lives on their own. The issue is twofold: on the one hand, women have less income during the working phase, on the other hand, they receive less pension because they pay less into the state pension system. Combined with longer life expectancy - life expectancy increases by three months with every year experienced - many women in retirement are actually threatened with a significantly lower budget without financial provision. The old-age poverty trap is mainly caused by dependencies. Therefore, I appeal not only to consider the consequences under pension law, but much more to strengthen women's own strength for financial self-preservation. I am an advocate of financial independence and believe it is important to maintain and increase the level of employability.
So are men less affected by the pension gap?
There are two types of pension gap: on the one hand, the difference between men and women, but much more important is your own pension gap, namely the difference between final salary and first pension. This is of course also relevant for men and averages around minus 30 percent, which is why they cannot ignore private provision either. Women even drop back to just 50 percent of their previous income, which is a significant turning point.
Which type of pension is the right one?
At DAMENSACHE.AT we show all forms of investment with their advantages and disadvantages in detail. We also explain the tax differences between the various options, which can be quite large. The portfolio is always put together individually. But for everyone, it is best to start early and postpone some of your consumption in order to be able to invest money for retirement. Because exponential curves live from the duration: If you start 20 years later, you have to invest three times as much to achieve the same effect. As a rule of thumb it has proven to always invest ten percent of the disposable income for the pension in order to be able to maintain the standard of living.
Anyone who invests in real estate, precious metals or financial products has to spend a lot of time doing this. How often should investors look at their portfolio?
It's like the check-up at the dentist or the health check: I recommend consulting with independent financial experts at least once a year. And not every woman or every man has to buy stocks at the same time. A structured and diversified securities account is a good solution for many. You can also build up a passive income with real estate, for example. The time horizon is an important factor in investment decisions.
"I advise young women in particular, who still have enough time, to structure their pension largely for themselves."
You recently also carried out a study on awareness of the issue of pensions among women, in cooperation with the Vienna University of Economics and Business. Which results were particularly surprising?
Almost 90 percent see the responsibility for financial security in themselves. Accordingly, they would be willing to set aside around 200 euros, i.e. ten percent of their net salary, on a permanent basis. At the same time, every fourth respondent knows women affected by poverty in old age. 73 percent would therefore like to visit an independent platform or event where they can find out more about financial pension issues, receive further training and advice. This also explains the high level of interest in our events and webinars.
Is the issue of pensions important for all women? Or are young academics, for example, less affected because they have better chances of a higher income and thus a first-pillar coverage?
We are sliding towards pension change with similar dramatic effects as climate change. Young women must therefore be particularly aware of the danger. It is really great when parents talk to their children about pensions and support them in their financial education. I also recommend looking at your personal pension account notification online, as your own pension entitlement is often overestimated. I advise young women in particular, who still have enough time, to structure their pension largely for themselves. I have a daughter of my own, for whom I wish a bright future. This is my contribution to a better world.
Marietta Babos studied economics as a macroeconomist in Budapest and Vienna and then worked on projects for one of the leading strategy consultancies for 70 different companies for twelve years. Her dissertation in St. Gallen received a top grade and was also published in book form. Babos founded DAMENSACHE.AT in 2018 as an independent consulting platform.
("Die Presse - Finanzwissen", print edition, 02.10.2020)
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