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3 Important Financial Planning Considerations for Women

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How to Navigate the Financial Challenge Women Face

Over the course of my 25 years helping individuals with financial planning, I have seen definitive trends highlighting the additional barriers women face to investing when compared to men. In previous articles, we’ve addressed a few of these unique financial challenges faced by women, such as the need to care for others (sandwich generation), the gender pay gap (partially attributed to unequal domestic responsibilities), longer life expectancies, shorter career spans, etc. In this article, we cover specific financial planning challenges women should address differently than men in order to protect not only themselves but also their families.

#1 – Insurance

This very morning, I read a social media post about a friend of a friend whose wife had recently passed away due to breast cancer. In the post, there was a nice writeup about the wife and how wonderful she was that noted she had left behind her husband and their two young children. In closing the post, there was a link to a Go Fund Me page for those who would like to donate to help the family cover upcoming expenses. These expenses included childcare and time the husband was going to be taking off from work. They had a goal of $30,000 and had raised about $12,000. It’s widely acknowledged that women face a gender pay gap, making on average $0.82 for every dollar a man makes.1 A lesser-known challenge is the gender life insurance gap. If my friend’s friend had considered life insurance, the need for the Go Fund Me page could have been nonexistent. As of 2021, only 47% of women have life insurance, compared to 58% of men. And men’s life insurance policies are, on average, worth nearly twice the amount of women’s ($423,102 for men compared to $231,342 for women).2

There are several reasons why it’s important for women, in particular, to maintain adequate life insurance.

  • Women contribute necessary income, even when they’re not the primary household income earner. Ask yourself, “could my family maintain its current lifestyle without my income?” Even if your spouse’s salary covers your basic living expenses, would your family’s lifestyle be the same if something were to happen to you? Would your children be able to continue participating in sports and activities? Would your husband be able to contribute to his retirement accounts at the same level? Even women who contribute a small portion of the household income should consider having a life insurance policy in place.
  • Stay-at-home moms’ contributions should not be underestimated. If you’re the primary caregiver to young children and have responsibility for managing your household, you’re providing valuable services to support your family. In fact, it’s been estimated that stay-at-home parents contribute approximately $180,000 of work per household every year.3

If something unexpected were to happen to you, replacing your household work would likely cost your spouse a significant amount of money, which is why it’s important to have a life insurance policy in place, even if you don’t work outside the home.

In addition to life insurance, women’s longer life expectancies mean they will likely face higher lifetime medical expenses and be more likely to need long-term care at some point in their lives. That’s why it’s even more important for women to maintain adequate health and long-term care insurance.

#2 – Retirement Planning

On average, women in the United States live five years longer than men.4 Consider what that means for a woman who’s trying to save for retirement. If she intends to live on $80,000 per year, she’ll need access to $400,000 more than an average man.

In addition, because their lifetime income is typically less than that of men, women may need to save a higher percentage of their salary for retirement — as well as implement smart investment strategies to help grow their assets over time.

To help navigate these challenges, women’s savings, investing and retirement planning strategies must be carefully designed and managed. We recommend for all our clients to have a financial plan. When I consider the needs of women, it’s no different. In some cases, however, women may shoulder more of the cost of their children’s college tuition or in assisting with the caretaking of their parents. This may leave them with less income of their own toward their retirement goals. If you think these competing goals may be in your future, then the earlier you start planning the more likely a successful strategy can be engineered.

#3 – Emergency Savings

Another challenge faced by women is the fact that they’re more likely than men to experience time out of the workforce, often because they’re caring for children or aging relatives. On average, women spend 44% of their adult lives out of the workforce, compared to 28% for men.5

This is why it’s vital for women to have a source of emergency savings. You should plan to have at least three to six months of living expenses saved in a liquid, easily accessible account. This money can come in handy should you face an unexpected situation that requires you to leave your job for a period of time. It can also prevent you from needing to sell out of your investments at an inopportune time, should an unplanned expense arise. 

Regardless of your unique situation or goals, there are two things all women should take to heart when saving and investing. The first is to not be afraid to ask questions and seek guidance. The second is to stay informed — even if money doesn’t interest you, be educated and plugged in!

Could you use some help planning for your financial future? Creative Planning is here for you. We help women navigate their unique financial challenges and achieve their long-term goals. We focus on providing you with the confidence and security of knowing that the actions you take today are setting you up for a secure financial future. For more information, schedule a call with a member of our team.


  1. As of 2022. https://www.payscale.com/research-and-insights/gender-pay-gap/#module-2
  2. https://havenlife.com/blog/life-insurance-statistics-2019-men-and-women/
  3. https://www.bankrate.com/insurance/life-insurance/gender-gap
  4. https://www.health.harvard.edu/blog/why-men-often-die-earlier-than-women
  5. https://www.ally.com/do-it-right/investing/should-women-invest-differently-than-men/

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.


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