As wealth in the United States continues to transition to women, women are becoming more involved in the investment decision-making process than ever before. Today, women control $10 trillion (about a third) of U.S. household assets, but that amount is expected to grow to $30 trillion by 2030 as Baby Boomers die and leave their assets to their wives and children.[1] As of 2021, 67% of women are now investing outside of retirement plans, up from just 44% in 2018.[2]

While this is all good news for women’s long-term financial security, women face unique investing challenges, including longer lifespans than their male counterparts, a higher likelihood of taking on care-giving responsibilities for aging parents and higher lifetime healthcare expenses.

The following tips can help you successfully navigate investing as a woman.

#1 – Designate separate accounts for separate needs.

Women often face multiple financial responsibilities, such as saving for retirement, paying for their children’s college educations, paying down debt, financially supporting aging parents, planning for healthcare expenses, etc. A great way to manage it all is by saving in separate accounts, each with a unique goal and designated timeline.

  • Emergency fund –The easiest way to start is with an emergency fund. You should have at least three to six months of expenses saved in a liquid account to cover any unexpected expenses. 
  • Retirement accounts – The sooner you start saving for retirement, the better off you will be thanks to the power of compounding interest. While it may seem counterintuitive to start saving for retirement before more immediate needs, an early focus on retirement savings is vital to your long-term financial security. At a minimum, be sure to contribute enough to your employer-sponsored retirement plan to receive your full employer match. Also consider opening a traditional and/or Roth IRA to maximize your savings.
  • 529 college savings account – If your goals include paying for your children’s college educations, a 529 plan is a great way to start. These plans allow your money to grow tax-deferred. And as long as the assets are used to pay for qualified education expenses, withdrawals are free from both federal and state taxes.  
  • Investment account – The next step in planning for your financial future is to establish a taxable brokerage account. Within this account, you will want to select a diversified mix of investments based on your risk tolerance, financial goals, time horizon and more.  

#2 – Diversify, diversify, diversify.

One of the most effective ways to weather both inflation and market volatility is by establishing a diversified mix of investments. Because different asset classes tend to perform differently under various market conditions, a diversified portfolio can help ensure that if one type of investment is performing poorly, a different type of investment that is performing better can help offset volatility.

Your wealth advisor can help you establish a diversified portfolio of investments that spans various asset classes, investment types, geographic regions, market capitalizations and industries.

#3 – Take a long-term approach.

When it comes to investing, one of the biggest mistakes many women make is allowing fear to influence their decision-making. It can be easy to worry about short-term market fluctuations, especially when you see the balance of your account dip. However, fear-based selling can quickly derail decades of progress within your portfolio.

History shows us that a diversified portfolio in line with an investor’s long-term goals, risk tolerance and time horizon has a good chance of growing over time. However, when you sell at a loss in an effort to avoid market volatility, not only do you lock in portfolio losses but you also miss out on the opportunity to benefit from a future rebound.

Take time to establish a thoughtful, diversified portfolio in line with your long-term objectives, risk tolerance and time horizon, and you should be well positioned to weather future market volatility.

#4 – Automate.

Another great way to ensure a more secure financial future is by automating your investments. Women often have a lot of responsibilities at any given moment. Establishing automatic retirement plan contributions and savings deferrals can be a great way to consistently save without adding another item to your to-do list.

If you are looking for an advisor to help you establish a custom investment strategy, we would love to have a conversation. To learn more about how United Capital Financial Advisors can help you plan for the future, please contact us.


[1] https://www.mckinsey.com/industries/financial-services/our-insights/women-as-the-next-wave-of-growth-in-us-wealth-management

[2] https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/about-fidelity/FidelityInvestmentsWomen&InvestingStudy2021.pdf

This commentary contained herein is intended for informational purposes only and should not be construed as tax, legal or investment advice. Past performance is not indicative of future results. Clients should obtain their own tax, legal or investment advice based on their circumstances. The material is based on sources deemed reliable but is not guaranteed.

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