Today, women are not only significant consumers but also vital decision-makers in the financial landscape. The upcoming ‘Great Wealth Transfer’ is set to shift $30 trillion1 from Baby Boomers predominantly into the hands of women. This monumental shift underscores the importance of understanding the challenges women face and the role of financial planning in growing and preserving lasting wealth.
Recognizing Unique Challenges
Despite significant advancements, women often encounter gender inequities and various obligations that can impact their long-term wealth accumulation. For example, caregiving responsibilities2—whether for children or elderly parents—often fall disproportionately on women, resulting in unpaid labor that can reduce working hours, affect career trajectories, and disrupt participation in retirement plans like 401(k)s. Over a 40-year career, the gender and racial wage gap can result in a loss of up to $1 million for women.3
Moreover, the gender wealth gap , which highlights the difference in the value of owned assets between women and men, provides a broader perspective on inequality. This gap considers critical factors like emergency savings, debt, real estate, and investments—key elements essential for achieving long-term financial stability. Here are a few important considerations:
Women tend to adopt a more conservative approach to investing than men, which may lead to missed opportunities for significant returns over their lifetimes. 4
With 72% of financial advisors being men5, many women may feel less inclined to engage with financial advisors, as the industry has not always focused on their unique needs.
Although women generally have longer life expectancies, only 53% feel confident in their ability to retire at their desired age, compared to 66% of men. 6
These factors highlight the importance of self-advocacy, solid financial planning, and taking control of one’s financial future.
Identify Your Short and Long-Term Goals
Approaching financial planning with intention is essential. Instead of viewing money solely in practical terms, consider how it can support your personal goals, family, and legacy. Reflect on questions such as:
- What are my core values?
- How can I foster my financial independence?
- How do I wish to support my loved ones?
- What does my ideal retirement look like?
- What causes are important to me?
Once you’ve identified your core values, develop actionable short-term objectives, such as:
- Putting aside an emergency fund (three to six months’ worth of living expenses).
- Paying down high-interest debt.
- Setting up a tax-advantaged 529 plan for your child.
Long-term goals may include:
- Securing investors to launch a women-led business.
- Purchasing a second home for retirement.
- Creating a Trust to transfer wealth to future generations.
Your goals will evolve over time, but outlining them is a vital first step in crafting a comprehensive financial plan.
Build a Comprehensive Wealth Management Plan
With clearly defined goals, the next step is to analyze your net worth by subtracting liabilities (like loans and mortgages) from assets (such as cash, investments, and real estate). If you share financial responsibilities with a partner, it’s essential to consider joint assets and liabilities.
Collaborating with a team of skilled professionals, including financial advisors, estate planning attorneys, and tax specialists, can help you create a personalized financial roadmap that includes:
Investment Management and Asset Allocation Planning: Develop a diversified investment portfolio that aligns with your long-term financial goals while managing risk.
Tax Planning Strategies: Implement strategies to minimize your tax liability and maximize your wealth, such as contributing to retirement accounts or engaging in charitable giving.
Insurance Planning: Consider various insurance options—life, liability, long-term care, and disability—to secure your financial future, as well as legal structures like trusts to protect your assets.
Retirement Planning: Evaluate your retirement needs and embrace strategies to maximize contributions to retirement accounts and manage withdrawals.
Estate Planning: Create a plan that ensures your assets are distributed according to your wishes while minimizing taxes and supporting charities that matter to you.
Regularly reviewing your financial plan is crucial to adapt to changes in your financial situation, life circumstances, or economic landscape.
Empower Your Financial Well-Being
By developing a well-rounded financial plan, you can navigate the complexities of wealth management with confidence, laying the foundation for a legacy for yourself and your loved ones.
Crescent Harbor understands that your financial journey is unique and we’re here to support you at every step of the way. We’ll discuss your needs and vision, give objective advice, and provide customized planning and strategies to help you meet your goals.
Let’s connect on what matters most to you.
This material is for informational purposes only and should not be construed as tax or legal advice.
Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.
Sources
4 https://www.ellevest.com/magazine/disrupt-money/closing-the-gender-wealth-gap