Question:  

Are women’s financial planning goals different than men's?

Answer: 

Financial planning is about you, and women are likely to have unique financial challenges that make proactive planning and investing all the more important. We’re businesspeople, entrepreneurs, mothers, wives, caretakers, mentors, and leaders, and individuals. 

Your life consists of goals, dreams, and a plan to match resources to time. It starts with knowing where you want to go, then figuring out how to get there. Women and men can benefit from balancing needs with wants and prioritizing long-term goals over near-term desires. Creating a customized plan understanding your wants and needs can help you reach your goals whether it’s building a comfortable retirement, paying for children’s education, purchasing a second home, or just saving a bit more each month. It starts with realistic goals, priorities, and a plan to address your concerns.

Women are in and out of the workforce more than men often to nurture family (children and parents). This can lead to interruptions in earnings, highlighting the need for more focus around savings and investing. Statistically, women have comparable education to their male counterparts, yet show lower contribution rates (6% compared to 8%) in 401(k) plans and have lower median 401(k) balances (almost 50%) less than men. On average, women live 5.7 years longer than men according to the CDC National Vital Statistics report of 2022 making it reasonable and responsible to have a strategy in place for the longer life expectancy.

Whether you’re a domestic engineer, retired, or run a business (42% of businesses in the United States are run by women), a strategic plan for obtaining your goals is the foundation of working towards your goals. Planning for your future is an ongoing process. Retirement planning is frequently the focal point of financial plans, yours should also consider many life events you’ll experience on the journey. Weddings, births, graduations, family vacations, new homes, and leaving a legacy should all be included in your long-term plan, as should the other less predictable detours. This is why it’s important to communicate with your advisor to review progress and adjust along the way. 

In our later years, 80% of women will be single, resulting in increased financial responsibility and the stresses that may come with needing to manage funds on our own. 

Ensuring day-to-day finances are maintained, understanding the possibility of reduced Social Security benefits after the loss of a spouse, reconsidering retirement income plans, assessing the impact on taxes, and longevity planning are all important considerations. 

An interesting statistic is that the ratio of women to men who are age 85 and older is 2:1.

There is no typical woman investor but it’s worth recognizing the challenges women investors often face. Every investor has a unique life path interspersed with milestones and perhaps a few speed bumps along the way. Whether or not your financial plan will involve coordination with a spouse or family member, it may be beneficial to have a professional partnership and someone to communicate with as you implement a financial strategy to support your long-term success and that of those you care about the most.

It's important for everyone to build a team of trusted financial professionals to serve as a sounding board. Since women are more likely to find themselves alone and one hundred percent responsible for managing all financial matters, finding the right professionals with whom to collaborate, create, maintain, and monitor a tailored financial plan may be more significant than for men. It all begins by clearly articulating goals and what it may take to reach them, maximizing saving and investing, and portfolio management. Yes, men and women are different but alike and have similar financial goals. Stay focused and plan accordingly.