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By Lexi Olian
The way we talk about money is changing. For decades, financial planning was built on assumptions that didn’t fully reflect the experiences of women—assumptions about earning potential, caregiving responsibilities, risk tolerance, and even life expectancy. But here’s the truth: women face unique financial challenges, and acknowledging them isn’t about creating division; it’s about creating better, smarter strategies that work in real life.
Women tend to live longer, often earn less over their lifetimes due to wage gaps and career interruptions, and are more likely to take on caregiving roles that impact their financial trajectory. These factors add up to a reality where financial planning for women isn’t just a variation of the standard approach—it’s a different equation altogether.
The gender wage gap is often discussed, but its long-term impact is even more striking. Women in the U.S. earn, on average, 85 cents for every dollar earned by men. But this isn’t just about salary differences—it’s about lost investment opportunities, lower Social Security benefits, and a reduced ability to accumulate wealth over time.
Consider this: A woman who earns $85,000 per year over a 40-year career could lose out on hundreds of thousands in lifetime earnings compared to a male counterpart with the same skills and experience. That gap compounds when factoring in investment returns, meaning women often enter retirement with significantly smaller portfolios despite needing their money to last longer.
What to do: A proactive investment strategy is essential. Women tend to be excellent investors—studies show they often outperform men due to a more disciplined, long-term approach—but hesitation or a lack of confidence can lead to money sitting in low-yield savings accounts rather than working in the market. A strong financial plan ensures investments align with long-term goals, taking advantage of compounding growth over time.
Women are far more likely to step away from the workforce to care for children or aging parents. The financial impact? Again, it’s not just lost wages—it’s lost promotions, lost 401(k) contributions, and lower Social Security benefits.
For example, a woman who takes a five-year career break to care for a child may forgo $500,000+ in lifetime earnings, factoring in missed salary increases, employer retirement contributions, and investment growth. And for women who later return to the workforce, the “motherhood penalty” often results in lower wages and fewer leadership opportunities.
What to do: Financial planning should incorporate these career shifts. Women who anticipate caregiving breaks can proactively save in spousal IRAs, maintain professional networks for smoother reentry, and work with financial advisors to ensure investments and savings stay on track even during non-earning years.
Women, on average, live five to seven years longer than men. While that’s great news in many ways, it also means retirement savings need to stretch further. Many women underestimate how much they’ll need in later years, and since they’re more likely to outlive a spouse, they may face managing finances alone at a time when cognitive decline can make financial decision-making more challenging.
What to do: Planning for longevity means prioritizing retirement savings early and ensuring a sustainable withdrawal strategy. Health care costs should also be a major consideration—women typically face higher medical expenses in retirement due to their longer life expectancy, with estimates suggesting they may need $30,000 to $40,000 more than men. Factoring in long-term care insurance, strategic asset allocation, and estate planning is essential to maintaining financial security.
There’s a persistent myth that women are more “risk-averse” when it comes to investing. The truth? Women are risk-aware—which, when paired with the right financial plan, is an asset. They tend to invest more conservatively but are less likely to panic-sell during market downturns. The challenge is that many women hesitate to invest at all, keeping too much cash on the sidelines.
What to do: A well-structured investment plan should reflect both short-term security and long-term growth. Working with a financial advisor can help bridge the gap between risk perception and actual market performance, ensuring women’s portfolios are positioned for both resilience and reward.
Women’s financial journeys are complex, but that complexity doesn’t have to be a disadvantage. By recognizing the unique challenges women face—and building strategies to address them—financial planning becomes a tool for empowerment, security, and long-term success.
Whether you’re navigating career shifts, preparing for retirement, or simply looking for clarity in your financial future, Treehouse Wealth Advisors is here to help. Let’s create a plan that works for you.
Garrison Point Advisors, LLC doing business as “Treehouse Wealth Advisors” (“TWA”) is an investment advisor in Walnut Creek, CA registered with the Securities and Exchange Commission (“SEC”). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. TWA only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of TWA’s current written disclosure brochures, Form ADV Part 1 and Part 2A, filed with the SEC which discusses among other things, TWA’s business practices, services, and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.
Certain hyperlinks or referenced websites, if any, are for your convenience and forward you to third parties’ websites, which generally are recognized by their top-level domain name. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with TWA with respect to any linked site or its sponsor, unless expressly stated by TWA. Any such information, products or sites have not necessarily been reviewed by TWA and are provided or maintained by third parties over whom TWA exercises no control. TWA expressly disclaims any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites.
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