Women have more wealth than ever before. Currently, U.S. women control $10 trillion, a third of total US household financial assets. By the end of this decade, McKinsey estimates that amount could increase to $30 trillion.
Yet, despite this growing financial influence, many women still face unique challenges in building and protecting their wealth. Life events, career patterns, and societal expectations can subtly influence how women approach financial decisions.
The upside is, when women use the right strategies, their portfolios tend to benefit more than men's. So whether you're just starting out or building on years of investing, here are five smart investing moves that can help you build confidence and make the most of every financial opportunity.
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1. Start earlier than you think
Time in the market is one of the biggest wealth multipliers. If you invest $300 a month starting at age 25 and earn a 7% annual return, you'll have about $745,000 by 65. Wait until 35, and you'd need to save $640 a month to hit that same target.
Career breaks, caregiving requirements, and uneven pay growth mean women often have fewer years of consistent investing, or the ability to invest less than men. But starting early, even with small amounts, can help offset those interruptions and pay gaps.
2. Leverage tax-advantaged accounts
Retirement accounts like 401(k)s and IRAs, along with Health Savings Accounts (HSAs), can give you an immediate tax break or decades of tax-free growth.
While the number of women contributing to an HSA is on the rise, women are less likely than men to invest those funds. Investing HSA dollars, rather than leaving them in cash, can unlock the potential for long-term growth that compounds tax-free when used for qualified medical expenses. Similarly, if your employer offers a match for your workplace retirement plan, make sure to take full advantage of it so you don't leave free money on the table.
If you're one of the 8% of employed women who work for themselves, consider a Solo 401(k) or SEP IRA, which have higher contribution limits and can help close a retirement savings gap. These options can give you more control over building your financial future while you build your business.
3. Balance growth and stability
Historically, women typically had more conservative portfolios than men. This mindset is shifting though, with newer data showing women and men now have more comparable investing patterns.
While a conservative portfolio is good for reducing volatility, it can also limit long-term growth. Having a diversified mix of stocks for growth and bonds for stability can offer the best of both worlds.
For example, in your 30s or 40s, allocating 70% to 80% of your investment portfolio to equities with the remainder in bonds or other fixed-income investments can capture market upside while cushioning downturns. This approach keeps you positioned for growth without taking on more risk than necessary for your stage of life.
4. Reinvest dividends and stick to the plan
Research suggests women tend to trade less frequently, which may be one of the reasons their portfolios outperform men's. Sticking to a plan with a "set it and forget it" approach helps you avoid emotional decision-making when markets dip. You'll be less likely to enter and exit the market at the wrong time, so you'll increase your chances of long-term success.
Likewise, reinvesting dividends automatically buys more shares, compounding your returns without extra effort. Over time, that small, automatic step can add up to a surprising boost in your portfolio's value, all without requiring additional time or attention from you.
5. Plan for a longer retirement
The CDC reports women live about five years longer than men on average, meaning your portfolio may need to stretch further. During retirement, women can also expect to spend over 10% more than men will on healthcare costs and medical expenses. Inflation can erode purchasing power over those extra years as well, so growth assets remain important even late in your investing life.
Income sources you can't outlive, such as Social Security or annuities, should be part of your planning. These steady streams can help cover essential expenses, giving you peace of mind and freeing up other assets for discretionary spending or unexpected costs.
Turn savvy choices into lasting wealth
The path to financial success isn't about predicting every market move. It's about showing up, making intentional choices, and letting time and compounding do the heavy lifting. Keep leaning into your strengths, staying consistent, and following through on your plans. Confidence paired with a solid plan can be just as powerful as any stock tip.
