Mitigating the Five Gaps Experienced by Women Investors

Published July 20th, 2022
Reading Time: 5 minutes
empower retirement

Written by:

Alva A. Fuller CFP®, EA
Zoe Advisor Network

Mitigating the Five Gaps Experienced by Women Investors

Published July 20th, 2022 
Reading Time: 5 minutes
empower retirement

Written by:

Alva A. Fuller CFP®, EA
Zoe Advisor Network

Are you a woman who can confidently say you understand your finances regarding retirement?  Understanding the main financial gaps faced by women, helps empower retirement and build the financial confidence you are looking for. 

Are you a woman who can confidently say you understand your finances regarding retirement? If not, don’t feel alone: countless other women struggle with planning for their financial future, including retirement. 

As women, we’ve faced several obstacles when accumulating wealth over the years – from financial literacy gaps to factors that are entirely out of our control. Throughout my practice as a financial advisor, I’ve learned the importance of understanding trends, analyzing gaps, and making viable changes for the future in order to empower retirement for women.

Understanding Past Trends

When women decide to hire a wealth planner, there are noticeable patterns on the “why.” Here are a few I’ve noticed:

Divorce or Death of a Spouse:

Many women seek financial advisors for planning, following a death or separation from a spouse.

Leaving a Job:

When a woman leaves a job, they are either unaware of their options, or they often leave their 401(k) with a past employer.


Can a parent afford to leave their job and continue to meet their financial obligations?

Dual-Income Households:

Men usually take the lead, as the primary financial decision-maker in the household.

However, most women aren’t active financial planners when compared to men. In fact, women rarely take control of significant household financial decisions or get involved in investing. The reason? There are some common gaps that have limited women throughout the years. Keep reading to navigate through the financial gaps that must be reduced to empower retirement. 

5 Gaps Experienced by Women Investors:

1. The Wage Gap:

Recent studies conducted in 2020 highlight that women earned 84% of what men earned. Based on this estimate, women would have to work an additional 42 days to earn the equivalent amount made by men. Unequal pay inevitably creates a gender retirement gap. If women earn less, they will have less to contribute to their retirement.

2. The Resume Gap:

Women face more career interruptions, particularly due to motherhood – which is a restricting factor when it comes to retirement contributions. The wage penalty for motherhood notes that despite more work-from-home capabilities, mothers are still twice as likely to take time off when they start a family – thereby, negatively impacting their careers.

3. Life Expectancy: 

By 2060, life expectancy is projected to increase to 85.6 years. On average, men are projected to live for 84 years, compared to 87 years for women. This can impact retirement, healthcare, and general living expenses that women will most likely need more of.

4. The Knowledge Gap:

A recent Fidelity study showed that 56% of women are likely to credit their partners as the savvier investor. Only 19% of women say they are the household’s primary decision-maker for long-term retirement and investment planning. If family finances fall under the responsibility of the male partner, the woman can be left vulnerable in the event of divorce, or the death of their partner.

5. Investment Planning Gap: 

Studies show that fewer women contribute to their 401K or IRA, compared to men – and are more likely to take an early withdrawal from their retirement plan. Additionally, women are more likely to have difficulties paying monthly bills than their male counterparts, leading to the desire for low-risk investments with high liquidity.

It’s not all bad news though: the wage gap is decreasing among young workers, younger generations of women investors are taking increased initiative around their finances, and women are looking at investing from a more conscious point of view.

How Can You Take Control of Your Financial Future and Empower Retirement?

1. Become a Savvier Investor

If you want to be in control of the finances in your household, you need to understand them first. By familiarizing yourself with the “why” behind your investments, aligning them with your values, and ultimately prioritizing your preferences: you can have peace of mind that you’re able to do it on your own. Here are some tips on how you can get more involved in your finances: 

Normalize the conversation around money: One way to build financial literacy is by joining or creating groups with like-minded people who are open to meaningful discussions about wealth. Connect with women in your field and learn about financial empowerment through shared experiences. 

Ask them if they have similar financial challenges to you – and if so, how they overcame them? 

Start today and take action on your financial obligations: Start, invest early, and automate your savings as much as possible. You do not have to take huge investment risks to feel that you’ve done something. Here are examples of simple steps you can take to automate your savings: 

  • Investigate increasing your contributions automatically each year if you are a participant in a 401(k) plan.
  • If you have not built an emergency fund: automate your savings by creating a direct deposit of a portion of your paycheck to go into a separate bank account dedicated to your savings fund.

2. Get Help From an Expert:

Work with a wealth planner with expertise in financial planning for women, who can give you the guidance and tools needed to take control of your retirement investing. If you’re in the stage of interviewing and hiring an advisor, here are some musts to keep in mind. 

A great advisor:


Guides you on the right path: They are aware of the above gaps and intrinsically motivated to help you mitigate the financial impact of them.

Is empowered to give better advice: An advisor who is invested in you will take the time to equip you with helpful knowledge that empowers you to make informed decisions. Your advisor should be able to provide tailored advice based on your unique needs. The best advisors are willing to meet you where you are – not to pass judgment on the past – and get you to where you need to be.

Is passionate about your prosperity: For dual planners (i.e., financial advisors working with a couple), look for someone who tries to inspire joint managers of household wealth – where everyone is in the loop about financial planning. Work with someone who encourages equal engagement and can be held accountable for maintaining both spouses’ involvement in all communication areas.

Empower Retirement

As a woman, your retirement shouldn’t feel daunting. The wage gap is decreasing in younger generations, and more young women are contributing to IRA accounts. The future is promising, but only if you understand the headwinds you face.

I have worked with dozens of women, giving them the tools needed to develop viable plans to overcome any hurdles. 

Reach out to advisors that prioritize your financial future, while giving you the peace of mind to know that your retirement is in safe hands.

Disclosure: This blog is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

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