Key Points


  • Research has found that even as more women are expanding their investments beyond retirement accounts, some still feel behind. 
  • To ensure a secure retirement, taking certain steps with finances now can make a big difference in how women will live in 40 years, according to one advisor. Here are some steps to get started.

Although women tend to outperform men in investing, some may still be at risk of falling behind. Fidelity Investments' 2021 report, which studied over 5 million account holders, revealed that women's returns were, on average, 40 basis points or 0.4% higher than men's returns over a decade.

Despite this, 33% of women are still missing out on investing outside of retirement accounts, as reported by Fidelity. 

Furthermore, a recent report by Goldman Sachs found that 50% of women feel behind on retirement savings, compared to 35% of men. 

However, Fidelity noted that 67% of women are gaining confidence to invest outside of retirement accounts.

Stacy Francis, a certified financial planner and member of the CNBC Financial Advisor Council, believes that women who haven't made investing a priority should prioritize it. 

According to Francis, investing is not just a luxury but a necessity. 

She suggests that women should prioritize maximizing their 401(k) and IRA investments and strive to do more beyond that.

Retirement Saving Planning


1. Assess your current situation.


Women may be forced to take control of their finances in a different way due to major life challenges such as having children or going through a divorce. 

However, even if these life events have not yet occurred, it is still wise to review your cash flow by examining your total income and expenses. According to Francis, it's crucial to know your financial situation in order to make informed decisions and create a plan for growing your assets over time.

Additionally, it's important to evaluate your progress towards retirement thus far and determine what you hope to achieve in the future. According to Francis, it's essential to recognize that every dollar you save now has the potential to grow significantly and multiply in value by the time you need it in retirement.

2. Begin with taking "a small step forward."


The lack of education is the primary factor that prevents women from investing more, as per Francis. It is understandable to feel intimidated if you're uncertain about investing. 

According to Francis, taking a small step forward

Regardless of where you are in your investment journey, is the way to go. This could entail investing $50 or less per month. Starting with a small amount helps establish an investment habit and takes advantage of time in the market, which is an investor's most significant advantage.

3. Make a daily decision to educate yourself.


Francis suggests making a daily commitment to educate yourself to enhance your financial literacy and become a better investor. 

It doesn't have to consume a lot of time, even reading for just two or three minutes a day can make a significant difference. 

Several resources are available, ranging from nonprofit organizations such as SavvyLadies.org, founded by Francis, which provides free financial literacy resources, to websites and books.

Over time, developing this habit will assist in filling your knowledge gaps and making better financial decisions, resulting in an improved financial position.

According to Francis, it's like writing a love letter not only to your present self but also to the person you will become in 10, 20, 30, or even 40 years. We must ensure that we're taking care of our future selves as well.