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Are you confident in your financial future? If not, you’re not alone! According to Allianz Life’s latest Women, Money and Power Study, many women still feel uncertain about retirement and their financial security — even those who have accumulated wealth.
Women often face financial challenges, like income disparities and longer life expectancy, that can impact their long-term security in the shape of lower retirement savings and fewer investment assets. While this reality is far from ideal, understanding these gaps is the first step toward financial empowerment and securing your future on your terms.
Here are four financial gaps women experience—and how you can mitigate them to take control of your wealth.
1. The Wage Gap: Less Earned, Less Saved
Think of your financial journey as curating a timeless wardrobe. You’ve invested in classic pieces, mixed in a few trendy accessories, and planned outfits that fit every occasion—only to realize that others had access to more designer staples or exclusive collections. The wage gap can feel a bit like that. Despite putting in the same effort, women may find themselves with fewer resources to work with.
Over time, these disparities can create financial obstacles. The wage gap makes it more challenging to accumulate wealth and maintain financial security in retirement in the long term. Making informed decisions sets the stage to start bridging this gap.
The Impact on Your Finances:
- Lower lifetime earnings lead to smaller retirement savings.
- Less disposable income reduces investment opportunities.
- Delays in wealth accumulation can increase financial vulnerability later in life.
What you can do:
- Negotiate salaries and raises regularly.
- Maximize employer-sponsored retirement contributions (like 401(k)s).
- Ensure financial independence by investing beyond traditional savings accounts.
Learn how to align your investments with your financial goals.
2. The Longevity Gap: Women Live Longer, But Are We Prepared?
Imagine planning a vacation without knowing how long it will last. That’s what retirement planning can feel like when life expectancy is uncertain. With longer lives come more years to fund. That makes it all the more important to have a plan in place that can keep up with your lifestyle.
A longer life expectancy may require careful financial planning. An extended retirement often leads to higher healthcare costs and the need for sustained income. Women may benefit from strategies that help balance immediate needs with long-term financial security. Some of these strategies include structured withdrawals and diversified investment portfolios.
Why this matters:
- More years in retirement require more savings.
- Healthcare costs and long-term care needs increase.
- Higher risk of outliving savings without proper financial planning.
What you can do:
- Plan for a longer retirement horizon by diversifying income sources.
- Factor in healthcare & long-term care costs early.
- Consider annuities or diversified income streams to ensure stability later in life.
3. The Knowledge Gap: Practicing Financial Confidence
Have you ever felt like investing is a language you never learned? You’re not the only one! Many people hesitate to make financial decisions simply because they haven’t had the chance to fully explore their options (or because they are overwhelmed by the amount of information out there). But just like trying a new recipe, financial literacy becomes easier with practice and the right guidance.
Building awareness around investments can build financial confidence and support decision-making. Learning more about wealth management and seeking guidance from professionals may provide clarity and confidence in your long-term financial future.
Why this matters:
- Less involvement in investment decisions can lead to missed opportunities.
- Increased financial stress in case of divorce or widowhood.
- Dependency on others for long-term financial security.
What you can do:
- Start engaging with your finances. Track investments, ask questions, and take ownership.
- Seek financial education through courses, books, or professional guidance.
- Work with a financial advisor who values your involvement and puts your priorities first.
How to find the right financial advisor for your needs
4. The Investment Gap: Playing It Too Safe
Picture this: You have a closet full of neutral-colored clothes. While safe and practical, it may not always be the best for every occasion. The same applies to investing—sticking only to low-risk options may limit long-term growth, making it harder to meet your financial goals.
A diversified investment approach spreads assets across different types of investments, which can help reduce exposure to any single risk. Female investors who allocate investments based on their risk tolerance may experience different financial outcomes over time.
A more conservative investment approach may have different long-term growth outcomes compared to one that balances risk and reward. That’s why it’s essential to find the right investment strategy for your unique risk tolerance. There’s no one-size-fits-all solution when it comes to building financial security.
Why this matters:
- Too much cash means lost investment opportunities.
- A conservative portfolio may not keep up with inflation.
- Long-term financial stability depends on a strategic investment approach.
What you can do:
- Diversify investments beyond savings accounts and CDs.
- Ensure your portfolio matches your risk tolerance & long-term goals.
- Explore if working with an advisor is the right approach for you to develop an investment strategy that balances risk and reward.
Taking Action: The Path to Financial Empowerment
Financial planning doesn’t have to feel overwhelming. Going back to the wardrobe analogy, you can think of it as curating your dream wardrobe: selecting pieces that fit your style, adapt to different occasions, and make you feel confident. Taking steps toward financial security works the same way. Choosing the right mix of investments, staying informed, and seeking guidance when needed can all contribute to a solid financial future.
A structured financial plan may help you make informed investment and retirement decisions. Seeking guidance from financial professionals can provide valuable insights to navigate investment options, retirement strategies, and wealth-building opportunities.
The key takeaway? You don’t have to navigate this alone. A financial advisor can provide personalized guidance, help you close these financial gaps, and give you peace of mind about your future.
Find the right financial advisor for your needs
By acknowledging these challenges and making informed financial decisions, women can take steps toward greater financial independence and a future aligned with their goals and lifestyle.
