Over the past century, the role of women in financial planning has undergone a significant transformation. This International Women’s Day, we celebrate the growing influence women have on the financial landscape. A recent study by MassMutual highlights that “Women continue to expand earnings, control 90% of purchasing decisions, and are trusted resources for aging parents and adult children.” In this blog, we’ll explore how women are leading financial decisions, the unique challenges they face, and how financial advisors can help women take charge of their financial futures.
Historical Context and Progress
Historically, women didn’t have an equal say in financial matters, but the 20th century saw significant societal changes. One pivotal moment came during World War II. With men going off to war, women entered the workforce in large numbers, taking on roles both in the workplace and at home.
As the 1960s and 1970s unfolded, women’s rights movements gained momentum. More women entered the workforce and pursued higher education, leading to greater financial independence. The dual-income households became more common, and women increasingly took an active role in both their homes and financial decisions. These decades marked the start of a new era where women became active decision-makers in their financial futures.
Financial Independence and Wealth Building
Today, women control 32% of the world’s wealth, according to a study by Fidelity, and that number is expected to rise. In addition to managing significant wealth, women also oversee more than $20 trillion in annual expenditures.
As women’s financial independence grows, many are prioritizing long-term savings and retirement planning. A study by the Transamerica Center for Retirement Studies found that nearly 70% of women are concerned about not having enough money for retirement. Though women tend to invest more conservatively, the gap is narrowing as more women seek financial guidance to improve their investment strategies.
Despite growing involvement in financial decisions, women still face challenges such as the gender pay gap, career interruptions for caregiving, and longer life expectancy. These challenges motivate women to seek financial advice, empowering them to make informed decisions and take control of their financial futures.
Women as Caregivers and Trusted Resources
Women are not only financial decision-makers in their households but also serve as trusted financial resources for their families. Many women are part of the “Sandwich Generation,” meaning they care for both aging parents and children. Around 60% of caregivers for aging loved ones are women, and many balance demanding careers while managing these responsibilities.
Challenges Women Face in Financial Planning
Despite women’s growing influence, they face unique challenges in financial planning. On average, women live longer than men. However, women typically have 32% less retirement savings than men, despite needing their savings to last longer.
This disparity is partly due to career interruptions for caregiving, which limit opportunities to contribute to retirement savings. Additionally, the gender pay gap continues to affect women’s ability to save. While progress has been made, women still face barriers to achieving financial equality.
How Financial Advisors Can Support Women
For many women, financial planning can feel overwhelming, especially when juggling careers, caregiving, and household responsibilities. This is where a skilled financial advisor can provide invaluable assistance. Financial advisors help women build financial literacy, and assist with decisions such as investments, taxes, and insurance, making financial matters more manageable.
Working with an advisor who understands personal goals and concerns also builds confidence in managing finances. Advisors simplify complex financial concepts, making it easier to make informed decisions that align with long-term objectives.
Women today are not just participants in financial planning—they’re leading the way. Increasing wealth and influence, women are reshaping the financial landscape. With the right guidance, women can overcome financial challenges, build wealth, and achieve financial independence.
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