Why Women Need & Deserve Tailored Financial Planning

Financial planning is a universal necessity for both men and women. However, it's crucial to recognize that women often navigate a distinct set of challenges in their financial and retirement planning journeys. Drawing inspiration from my career as a financial advisor for women as well as my firsthand experience as a woman planning for her own financial life, this article delves into the reasons why women both need and deserve a bespoke approach to financial planning.

Women Tend To Live Longer Than Men

One of the biggest considerations for women is their longer life expectancy compared to men (Source: TIME). The reality is that many women will outlive their partners and must independently sustain themselves for an extended period. Facing increased longevity and potential healthcare costs in their later years, women grapple with the necessity to save more for a secure retirement. This heightened demand places significant pressure on women to be proactive in financial planning, acknowledging the unique challenges they confront.

Women Deal With A Gender Pay Gap and “Pink Taxes”

Despite notable progress, the gender pay gap remains a formidable challenge for women: we generally earn only $0.82 for every dollar a man makes (Source: Pew).

Women also contend with the “Pink Tax” which is a widely accepted markup on goods and services marketed towards women (and for which men would pay less for a comparable product or service). It’s estimated that this added burden averages to an additional $1,300 for women annually (Source: JPMorgan). The cumulative impact of these financial inequities for women can potentially hinder them from reaching their financial goals. Financial planners attuned to the specific obstacles, like these, that women face and be ready to provide tailored strategies to counteract these persistent disparities.

Women Tend To Invest Differently Than Men

Research indicates that women often approach investment decisions differently than men for several reasons, including being a bit more conservative. But while many may not be participating in the stock market, of those that do, they tend to outperform their male counterparts. A recent analysis of more than 5 million Fidelity customers found that, on average, women outperformed their male counterparts by 40 basis points or 0.4% (Source: Fidelity). Understanding women’s unique investment philosophies – and the reasons behind them – is vital for financial advisors to be able to do.

Women Tend To Focus On Prioritizing Others

Women, renowned for their nurturing instincts, may prioritize the financial needs of loved ones over their retirement savings. While this selflessness is admirable, it's crucial for women to recognize the potential consequences of neglecting their own financial well-being. Financial planners working with women must understand and address this inclination, emphasizing the importance of securing one's retirement to avoid becoming a burden on loved ones in later years.

Women Are Generally Goal-Focused (Versus Numbers-Focused)

In contrast to a numbers-centric approach, women often prioritize the holistic progress toward their financial and life goals. This big-picture thinking distinguishes women's financial planning style, emphasizing the importance of outcomes over specific numerical benchmarks or achievements. Harnessing this tendency is actually a great asset that we can use during the financial planning process.

Recognizing the distinctive challenges women encounter in financial and retirement planning is critical in order to better serve women and craft effective, personalized financial strategies. If you are a woman look for support in taking control of your finances, I invite you to schedule an introduction call with me so that we can navigate your financial journey together.

Any opinions are those of Lauren Smith and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.