Wealth management for women 101

Building financial security is a priority for many women, yet their financial planning needs often come with unique challenges. Women’s financial journeys are shaped by distinct factors that can influence their savings, investments, and long-term goals. Addressing these concerns with proactive and comprehensive wealth management can make all the difference in achieving financial success.

This guide explores the core principles of wealth management, offering steps tailored to women’s financial needs and priorities. From developing a financial plan to planning for retirement and addressing estate planning, this resource provides practical strategies to help you make informed decisions and take control of your financial future.

What is wealth management?

Wealth management is a comprehensive strategy for building, preserving, and growing your assets. It goes beyond everyday budgeting and saving and focuses on making the most of your opportunities across the many different financial domains of your life.

For women, it often means preparing for milestones like retirement, covering healthcare needs, protecting family members, or adjusting to major life changes, such as a divorce or the death of a spouse. 

Partnering with financial advisors can offer valuable support as you navigate these decisions. They can help you clarify where you stand presently, where you want to go, and what financial roadmap will take you there. 

What makes wealth management for women unique?

Women often face specific financial hurdles that should be considered in their wealth planning. Understanding these challenges is the first step toward building a secure financial future. Be mindful of these common challenges:

Longer Life Expectancy: Women have been shown to outlive men by an average of nearly six years, with recent studies showing that the life expectancy gap between genders has widened over the past few decades.1 This means their retirement funds may need to last for more years. This longer timeline requires careful planning to cover living costs, medical expenses, and potentially long-term care services. Without preparation, the risk of depleting savings becomes more significant. 

Career Breaks: Studies have shown that women are more likely to press pause on their careers to care for children and other family members compared to men.2 While these breaks may be necessary or even desired, they can reduce lifetime earnings, lower retirement account contributions, and interrupt professional growth. 

Earnings Disparity: Studies have shown that there is still a persistent wage gap between men and women, and the gap widens with age.3 Over time, lower earnings translate into reduced Social Security benefits and smaller retirement accounts. 

Healthcare and Long-Term Care Costs: Healthcare expenses can pose a significant financial challenge for women, particularly as they age, with lifetime healthcare costs consistently exceeding those of men. Planning must account for ongoing medical expenses, specialized treatments, and the potential need for long-term care, all of which can greatly impact financial stability.4

Key components of wealth management for women

Successfully managing wealth means focusing on multiple interconnected areas, each contributing to long-term stability. From managing your daily expenses to planning for future ambitions, the components below work together to help you reach your personal financial goals.

Financial planning

An effective financial plan starts with knowing where your money is going. Tracking your income and expenses helps you make choices that reflect your priorities, whether it’s paying off debt, saving for a big purchase, or building a comfortable retirement.

A strong foundation for financial stability is having an emergency fund. This dedicated account provides a cushion for unexpected expenses, like major car repairs, unplanned medical bills, or even a career break, so you don’t have to dip into savings. Many experts recommend setting aside at least three to six months’ worth of expenses (sometimes up to a full year’s worth) to protect your financial security.

Investment planning

Building wealth through investing is an excellent strategy, but it works best when guided by a thoughtful plan. Begin by evaluating how much risk you’re comfortable with and spread your investments across various asset classes. By choosing a mix of options like stocks, bonds, and mutual funds, you can reduce the impact of market downturns in any one area.

Thinking long-term is also a key part of successful investing. This is especially important for women, given their longer life expectancy. Giving your investments time to grow steadily allows you to harness the power of market gains and compounding returns.

Retirement planning

Women often need to save more for retirement than men, partly because they tend to live longer. This makes it important to focus on accounts like IRAs or 401(k)s, which provide tax advantages while encouraging consistent growth. Even small contributions, especially when paired with an employer match, can make a big difference over the years.

Social Security may provide a supplemental income during retirement, but it’s unlikely to cover all your expenses. It’s helpful to understand how these benefits work, particularly for women who have experienced divorce or widowhood, as different circumstances can affect eligibility.

Tax planning

Managing taxes strategically is a powerful way to save money over time. Retirement accounts, such as IRAs and 401(k)s, not only have the ability to lower your taxable income today but also build wealth for your future financial needs.

Other options, such as charitable giving, can further reduce your tax burden and align with your broader financial goals. Women may also want to consider strategies like Health Savings Accounts (HSAs) to prepare for higher healthcare expenses in retirement or investing in tax-advantaged accounts such as 529 plans for a child’s education.

Insurance planning

Insurance is another cornerstone of a resilient financial strategy. From life and health insurance to disability and long-term care coverage, having the right policies in place can help you manage unforeseen challenges and protect your financial security.

For example, women often face higher healthcare costs over their lifetimes, making long-term care insurance a particularly valuable tool. Similarly, disability insurance can safeguard your income if you’re unable to work due to illness or injury. 

Estate planning

Estate planning is an important process that allows your assets to be managed according to your wishes. This involves preparing various legal documents. These documents may include wills, healthcare directives, and powers of attorney to protect both your financial and personal interests. Trusts can offer a useful solution for those looking to transfer wealth efficiently or protect assets.

Estate planning isn’t just for the wealthy—it’s a helpful step for anyone who wants to manage financial decisions regarding their assets and determine how they will be distributed. Taking the time to address these matters early can ease the burden on loved ones and give you confidence that your plans are in place.

Wealth management for divorcees

Divorce often brings major financial adjustments that require women to reassess their approach to managing money. Sorting out priorities and managing shared assets can often be an emotionally demanding and complicated process. However, with thoughtful planning and the assistance of a Certified Divorce Financial Analyst® (CDFA®), women can successfully rebuild their financial independence and secure their future after a separation.

Financial impact of divorce

Divorce typically involves transitioning from a dual-income household to managing finances independently, which can be a significant shift. Expenses that were once shared—like housing costs, childcare, and utilities—often increase as each party now maintains a separate household. This can create financial pressure for women, especially if they are also taking on primary caregiving responsibilities.

A detailed budget is a key first step in addressing these changes. Assessing your income and expenses post-divorce will help you identify areas to cut back or reallocate funds. Women should also consider short-term financial priorities, such as covering legal fees or paying off shared debts, while beginning to lay the groundwork for long-term stability.

Asset division and settlements

Dividing assets is one of the most challenging parts of divorce. Property, retirement accounts, investments, and other joint financial holdings must be divided fairly, often requiring legal tools like a Qualified Domestic Relations Order (QDRO). This document allows for dividing retirement accounts without incurring penalties, helping preserve both parties’ long-term savings.

Accurate asset valuation is also important during this process. Misunderstanding the value of investments or overlooking hidden costs—like taxes on certain accounts—can lead to inequitable settlements. Working with experienced financial and legal advisors can help you navigate these challenges, avoid costly mistakes, and reach your goals.

Rebuilding financial security post-divorce

Once the immediate financial matters are resolved, it’s time to focus on rebuilding your financial life. A fresh financial plan tailored to your new circumstances is often the best place to start. Update your budget to focus on long-term goals like saving and investing, while addressing immediate needs such as reducing debt or establishing an emergency fund.

Settlement funds, if available, can provide an opportunity to establish financial security. Consider using a portion of these funds to invest in long-term growth opportunities or to increase contributions to retirement accounts. Reassessing your financial goals and working toward them step by step can help you regain stability and confidence in your finances.

Retirement savings and divorce

Divorce frequently impacts retirement savings, especially when joint accounts like IRAs or pensions are divided. Using a QDRO can simplify the process of splitting these assets while minimizing penalties or tax implications. However, even with this tool, the division of retirement funds often requires careful planning to avoid jeopardizing your future savings.

After the division, it’s important to revisit your retirement plan and adjust your contributions to account for any losses. For women in their 30s or 40s, increasing contributions during their remaining working years can help make up for shortfalls. For older women nearing retirement, diversifying investments or exploring additional income sources may be necessary to meet their goals.

Wealth management for widows

Losing a spouse often leads to significant financial and emotional shifts. Adjusting to a new financial reality requires thoughtful planning and deliberate steps to establish stability. Below are the key financial considerations for widows during this transition.

Immediate financial concerns after losing a spouse

Handling immediate financial matters is one of the first steps after a spouse passes away. Gather important documents like wills, insurance policies, and account statements to understand your financial situation. Confirm access to all accounts, identify income sources, and address recurring bills, such as housing, utilities, and insurance payments. 

A temporary budget can help you track your expenses as you adapt to these changes. If your spouse was the primary earner, you might need to explore other income sources, such as survivor benefits or short-term savings withdrawals. Avoid making any major financial commitments or decisions until you have a clear picture of your long-term goals and resources.

Social Security and survivor benefits

Social Security survivor benefits can play an important role in maintaining your income after a spouse’s death. The amount available depends on your spouse’s earnings history and when you choose to claim the benefits. Waiting until full retirement age can increase your monthly payments, while claiming earlier reduces the amount. 

If you’re employed, delaying survivor benefits while using your income to cover current needs may be an option to increase your future payments. Consider how these benefits interact with other sources of income, such as pensions or retirement accounts, to avoid unnecessary tax burdens. 

Estate planning and inheritance

The passing of a spouse often calls for a review of your estate planning documents. Wills, trusts, and health directives may need updating to reflect your current circumstances. For instance, if your spouse was named as your executor or decision-maker in key documents, you’ll need to select someone new for these roles.

If you’ve inherited property or financial assets, you should consider thinking about how best to manage them. Decisions about trusts, tax implications, or reallocating funds into new investments may arise. Seeking advice from estate planning or financial experts can help you integrate these assets into your broader financial goals, ensuring they align with your plans for the future.

Managing investments as a widow

Taking an active role in managing your investments is key to maintaining financial stability. If your spouse managed the household’s portfolio, you might need to familiarize yourself with your current investments. Start by assessing your holdings to determine if adjustments are necessary to reflect your financial goals or risk tolerance.

Diversifying your investments is often a wise approach, as it spreads risk while providing opportunities for growth. Additionally, taking the time to regularly review your portfolio and adjust it over time will allow you to adapt to changing financial priorities.

Long-term financial planning for widows

Planning for the long term means setting financial goals and creating a step-by-step approach to achieving them. This could include increasing retirement contributions, developing new income sources, or reallocating savings to align with your current needs. Taking deliberate steps today to prepare for tomorrow can empower you to feel more in control and secure in your financial journey.

You may also want to consider preparing for potential healthcare or long-term care expenses. Purchasing long-term care insurance or dedicating a portion of your savings to medical costs can help protect your assets down the road. A comprehensive financial plan, developed with a fiduciary advisor, can provide the clarity and direction needed to confidently move forward.

We help with wealth management for women

Financial planning can be challenging, particularly when women face unique circumstances like caregiving, retirement preparation, or adaptation to life changes. Thoughtful strategies are key to managing these situations, and working with wealth advisors or financial advisors can help you make decisions that align with your goals. Personalized advice provides clarity and direction, especially during significant transitions.

Expert guidance is invaluable for tackling specific financial concerns. Whether you’re focusing on retirement accounts, creating a financial plan, addressing tax strategies, or managing estate planning, professionals offer tailored solutions that reflect your priorities. They also help with investments, planning for unexpected changes, and maximizing long-term opportunities, giving you greater confidence in your financial choices.

Taking the next step is simple. Our team specializes in wealth management and long-term planning, helping women design strategies that meet their unique needs. Schedule a consultation with our team today, and together, we’ll create a plan that supports your financial goals.

Sources:

1. https://www.aarp.org/health/conditions-treatments/info-2024/why-women-live-longer.html
2. https://www.pewresearch.org/short-reads/2015/10/01/women-more-than-men-adjust-their-careers-for-family-life/
3. https://www.pewresearch.org/social-trends/2023/03/01/the-enduring-grip-of-the-gender-pay-gap/
4. https://www.weforum.org/stories/2023/10/healthcare-equality-united-states-gender-gap/