Did you know that over the next decade, women are expected to receive $40 trillion as part of the great wealth transfer and that by 2030, it’s projected that women in the US will control $34 trillion in investable assets?1,2 That’s a huge shift — one that opens up incredible opportunities for women to take charge of their finances. Yet alongside these exciting prospects, women also face some unique financial challenges, particularly when it comes to preparing for retirement.
For one, although the gender wage gap has narrowed, women still earn 85% of what men make.3 As a result, they’re able to save less. Many may leave the workforce temporarily to have children, which also reduces opportunities to save. But with a longer average life expectancy than men, women may need more money set aside.4 And the strain of dealing with symptoms of menopause and perimenopause can lead some women to take a step back in their career at a time when they are in their peak earning years.5
So, how can women become more confident in financial decision-making, and set themselves up for a healthy financial future? Here are some tips that can help any woman — or man — feel more empowered.
Define your values and identify your goals
Redefining your financial attitudes takes some work. You may have to unlearn long-term habits and change how you think about money in fundamental ways. It starts with defining what you value. Do you want to live a healthier lifestyle? Provide greater stability for your family? Feel more confident and less stressed? Tapping into those motivations can help you stay the course as you make changes to your financial behaviors.
It also helps to know what you’re working toward — maybe it’s a new home, early retirement, higher or continued education, or starting a new business. Be sure to keep your goals SMART: specific, measurable, achievable, relevant, and time-bound.
Even though 69% of women identify as the primary financial decision-maker in their household, 38% rate their ability to manage their finances as fair to poor.
Increase your knowledge
Even though 69% of women identify as the primary financial decision-maker in their household, 38% rate their ability to manage their finances as fair to poor.6 Seeking out personal finance advice from a reliable source can help boost financial confidence. Forty-three percent of women reported feeling financially comfortable to well-off — but that figure increased to 53% among those who worked with a financial advisor.7 A reputable financial advisor can assess your situation and help provide guidance as well.
Know your worth and seek appropriate compensation
While men’s salaries climb steadily throughout their 40s, women’s earnings plateau in their late 30s, resulting in a gender pay gap of 25% by the time workers reach 30 years of experience — that adds up to about $500,000 per woman.8 Though you might be inclined to think the disparity is due to women pausing their careers to have children, the real cause is that women are much more likely to choose roles with more flexibility and less competition.9 The trade-off is that these roles also come with less pay.
This revelation is less than encouraging, but also suggests it’s never been more important for women to go for promotions and not wait until they’re sure they tick every single box before applying for a bigger, more lucrative position.
Build your protection
Seventy percent of women own life insurance but less than half (49%) own disability insurance.10
While life insurance has obvious benefits, like being a way to help take care of loved ones in the event of your death and having coverage that lasts your entire life with whole life insurance, you shouldn’t overlook disability insurance. Think of it as an income protection policy that can provide you and your family with income in the event you can no longer work, even temporarily, due to an accident or illness. If you’re young or live a careful life, perhaps this kind of protection seems unnecessary. But keep in mind that approximately 25% of workers in their 20s today may face a disability at some point in their career.11
Not every woman earns outside the home, but women who stay at home are major contributors too. One estimate finds that if stay-at-home partners were paid a salary based on the services they provide, they would earn approximately $205,000 a year.12 If a woman who works at home had to stop due to an unforeseen event, everyone in the family would be impacted. To help protect your family from this kind of emergency, review the option of spousal coverage with your financial advisor.
Plan for the future
Since women tend to live longer than men, the chances of them outliving their savings are much higher. Life expectancy at birth in 2024 was 76.5 years for men and 81.4 years for women.13 This means that when it comes to saving for retirement, women need to think of a longer horizon than 20 years. Depending on their retirement age, they may spend 30 years or more in this life phase.
You can gain confidence in handling your finances by increasing your knowledge and working with a financial advisor. By being honest about your current financial situation, understanding your fears and motivators, crafting a financial strategy, and then following through, you can begin to move from overwhelmed to more financially confident.