As older women already or about to be retired, many of us have begun thinking about the legacies we’d like to leave. We want to leave the world better than we found it, but we need our investments to keep us afloat financially once we’re no longer in the workplace. Is it possible to do both?
Yes! In today’s video, Margaret and PBS MoneyTrack financial guru Pam Krueger tackle the topic of socially responsible investing (SRI). To learn how you can support companies in tune with your environmental or social concerns while still achieving healthy financial returns, read on!
By the time we reach retirement age, we’ve seen the world change in ways we could never have imagined when we were young. A huge positive change has been in health care advances.
Many women over 60 can now expect to live into their 90s! But without enough money to “blanket the bed,” as Pam puts it, those extra years might not be the blessing we imagine.
So we have to be practical. Investing for our long-term financial security is critical. But must it conflict with our desire to be socially responsible? Can we invest in businesses that promote our favorite causes without running out of money?
Most definitely, says Pam! SRI combines positive environmental, social and governmental returns with healthy financial ones. For many of us, that’s the best possible outcome.
SRI became a “thing” in the 1990s, when people began seeking ways to build their nest eggs while creating a better world. Today, Pam advises, women have proven themselves much more interested in this investment strategy than men.
Socially responsible investing now includes two niche categories. Impact investing covers companies with a record of having beneficial social impacts on their communities. Environmental, social and governance investing (ESG) focuses on companies committed to complying with the latest environmental, social and governance guidelines.
The good news? After nearly three decades, statistics show that investments in socially responsible mutual or index funds have generated returns equal to or greater than those of the benchmark S&P 500 fund.
Professional money managers handling enormous pension funds are now putting money into socially responsible companies. Not only because people care about social causes and the environment, but because they’re proven, sound investments.
SRI mutual and index funds give you a terrific way to limit your financial risk. Instead of investing in just one company, investing in a fund gets you a tiny piece of every company that fund’s manager buys stock in.
But what if some of those companies are being managed in ways that you don’t like? Perhaps you discovered they’re polluters or pay their employees less than living wages? Or maybe some of them are guilty of discrimination in the workplace.
So how can you be sure that your precious retirement dollars don’t go to companies that practice policies completely against your ethical standards?
Pam’s online tool WealthRamp connects consumers with fiduciary financial advisors she’s personally screened as specialists in the SRI or one of its two niche categories.
Are you passionate enough about a social or environmental cause to want to include it as a legacy investment in your retirement financial planning? Wealthramp can link you to a fiduciary financial advisor who is more than merely competent in finding funds that support that cause.
How special is that? Only one in 10 of all investment advisors qualifies as a fiduciary financial advisor. Of that 10 percent, only 15 percent are SRI experts.
Select one of WealthRamp’s experts, in other words, and you’ll have someone truly exceptional putting your money to work supporting the causes you care about while protecting your retirement nest egg!
How important in socially responsible investing to you? If you’ve taken the plunge, what factors led you to put your money where your morals are? What causes matter enough to consider them your legacy investments? Please join the conversation below!
Tags Retirement Planning