Women today are earning more, investing more, and making more financial decisions than any generation in history.
They could also soon control as much as $30 trillion in financial assets that will be passed down by the baby boomer generation by 2030. But managing more wealth also means more responsibility, which can feel daunting without an investment plan in place.
This guide breaks down why investing is especially important for women, which strategies matter most, and how to get started.
Looking for a personalized investment strategy? Contact the team at ARQ Wealth to build a plan tailored to your financial goals. Call us at (480) 214-9572.
Why Investing Matters More for Women
Women and investing have a complicated history. For decades, the wealth management industry treated female investors as a secondary audience, and while that’s starting to change, women still face several notable systemic challenges.
The Gender Pay Gap Compounds Over a Lifetime
Women working full-time in the United States typically earn 81 cents to every dollar earned by men, according to the American Association of University Women (AAUW).
Lower earnings make it harder to reach financial goals because there’s less money flowing into savings accounts, retirement plans, and investment accounts every year.
The pay gap can have a staggering effect when compounded over decades, with women typically experiencing $542,800 in lost earnings over a typical 40-year career.
This is why investing, rather than just saving, matters so much for women. Investing gives your money a chance to grow at a rate that can offset the cumulative impact of earning less.
Career Breaks Reduce Lifetime Savings
Women are more likely to step away from the workforce to care for children or aging parents. A mother with one child sees her lifetime earnings drop by 28%, and each additional child reduces earnings by an additional 3%.
These breaks also have a compounding effect. A woman who takes five years out of the workforce doesn’t just lose five years of income.
She also loses out on five years of retirement contributions, plus the compounded growth those contributions would have generated over the next 20 to 30 years.
Women Live Longer and Need Their Money to Last
Women tend to live longer than men on average. At age 65, the average life expectancy is 21.1 years for women, compared to 18.6 years for men.
That means women need their retirement savings to stretch for an additional 2 to 3 years beyond what men typically plan for.
A longer retirement increases the likelihood of outliving savings. It also means more exposure to inflation, healthcare costs, and potential long-term care expenses.
Again, this is why having a dedicated investment plan is so critical.
The Retirement Savings Gap
By retirement, women’s account balances are often 30% lower than men’s, according to the World Economic Forum.
These gaps result from lower lifetime earnings, fewer years of employer contributions, and smaller Social Security benefits, all of which add up over time.
Individually, these challenges can appear small. But together, they have a major impact on retirement preparedness:
- Pay gaps compound while you’re in the workforce.
- Career breaks remove you from the workforce at key earning years.
- Once in retirement, you’re more likely to outlive your partner and manage finances alone.
All of this underscores the importance of building an investment portfolio to help you reach your financial goals.
How to Get Started Investing
If you’re new to investing, the process can feel intimidating. But it doesn’t have to be complicated. Here’s a simple framework to help you take the first step.
Step 1: Understand Your Current Financial Picture
Before investing, get a clear idea of where you stand financially. Calculate your total income, expenses, and any existing investments or debts.
The goal here is to understand how much money you have available to invest each month after accounting for essential expenses and potential debt payments.
Step 2: Establish Your Financial Goals
Your investing strategy is influenced by what you’re trying to achieve. Here are a few of the most common financial goals:
- Achieving a comfortable retirement
- Saving for a home purchase
- Putting money aside for your kids
- Reaching financial independence
Each goal has a different time horizon and risk tolerance, which influences the types of investments that make the most sense.
This is where speaking with a financial professional can help you determine the investment strategy that best aligns with your goals.
Step 3: Open the Right Accounts
The next step is to identify and open the investment or retirement accounts that will be the most valuable on your financial journey. These accounts typically fall into three buckets:
- Retirement plans: Accounts like a 401(k) or Individual Retirement Account (IRA) are great places to start. These are common retirement plans that help you invest for the future while providing significant tax benefits.
- Investment accounts: An investment brokerage account gives you the flexibility to invest and withdraw on your own timeline, making them great options for general financial goals.
- Savings accounts: These accounts are best for short-term financial goals and to counterbalance the risk in your investment accounts.
Step 4: Automate and Stay Consistent
By this point, you’ve got the framework for how you can start investing towards a prosperous financial future.
We’ve determined how much money you can invest each month, what your financial goals are, and which accounts to consider.
A common final step is to set up automatic contributions so your investments transfer each month without any additional work on your end.
Key Investment Strategies for Women
While there’s no single investment approach that works for everyone, there are common pieces of investment advice that can help you establish a solid foundation.
Let’s discuss some of the key investment strategies that most people find helpful.
Maximize Your Employer’s Retirement Plan
Many employers will offer to “match” your contributions each month as an extra workplace perk. For example: This means that if you contribute $500 per month, your employer will also chip in $500, bringing your total contributions to $1,000.
If your employer offers this perk, you’ll generally want to contribute enough each month to capture the full match. It’s essentially free money your employer puts towards your retirement.
Start Investing as Early as Possible
The amount of time in the market is a powerful tool for building wealth. The earlier you start, the more time compound interest has to work in your favor.
Consider this example: if you invest $200 per month starting at age 25 with a 7% average annual return, you’ll have approximately $525,000 by age 65.
If you start the same contributions at age 35, you’ll have roughly $244,000. That’s a gap of $281,000 from just ten additional years of compounding.
These examples are hypothetical and provided for illustrative purposes only. They are not guarantees of future results.
The sooner you start contributing, the better off you’ll typically be. It’s often more advisable to just get started rather than spend months or years waiting for the perfect conditions.
Take Diversification Seriously
Diversification is important for investments because it helps reduce financial risk and protect your portfolio from major losses.
Instead of putting all your money into one stock, company, or type of investment, diversification spreads your money across different assets such as stocks, bonds, real estate, and mutual funds. This way, if one investment performs poorly, other investments may still perform well, helping to balance out the losses.
Diversification also allows investors to take advantage of growth opportunities in different industries and markets while creating a more stable path toward long-term financial goals. Overall, it is a key strategy for building wealth while managing uncertainty in the market.
The right mix depends on your age, risk tolerance, and timeline, and working with a registered investment advisor can help you determine the allocation that fits your specific situation.
Plan for a Longer Retirement
Because women tend to live longer, your retirement plan needs to account for a 25- to 30-year time horizon or more. This has a few practical implications:
- Don’t shift too conservatively too early: Some investors move heavily into bonds and cash too quickly at retirement. While protecting short-term spending needs can be important, maintaining some long-term growth exposure may also remain important during retirement.
- Develop a withdrawal strategy: The order in which you draw from taxable, tax-deferred, and tax-exempt accounts can significantly impact how long your money lasts.
- Optimize Social Security timing: Delaying Social Security benefits until age 70 increases your monthly benefit, providing valuable protection against longevity risk.
Invest During Career Breaks
If you’re leaving the workforce to care for children or family members, consider these strategies to keep your investment plan on track:
- Make spousal IRA contributions: If you’re married and filing taxes jointly, your spouse can contribute to an IRA in your name even if you’re not earning income. This keeps your retirement savings growing during years when you’re not working.
- Maintain emergency savings: Keep three to six months of essential expenses in a high-yield savings account before allocating additional funds to investments.
- Continue making small contributions: Try to stay consistent, even if you have to reduce your monthly contribution. Even $50 or $100 per month into an index fund during a career break prevents you from falling completely behind.
Take Advantage of Catch-up Contributions (If Eligible)
If you’re over 50, you’re legally allowed to make large contributions to your retirement accounts.
For 2026, the standard 401(k) contribution limit is $24,500, with an additional $8,000 catch-up allowance for workers aged 50 and older (or $11,250 for those aged 60 to 63).
This means you can contribute $32,500 to your 401(k) if you’re 50 or older.
These extra contributions can help close retirement savings gaps, especially if you took career breaks earlier in life.
Learn more about the 2026 Retirement Contribution Limits.
Why Working With a Financial Advisor Matters
Investing on your own is entirely possible. But working with a financial advisor can often bring peace of mind as they’ll be able to help with challenging tasks like:
- Building a comprehensive financial plan that accounts for your income, financial goals, and timeline.
- Determining the right asset allocation based on your personal risk tolerance.
- Navigating complex decisions during major life transitions like divorce, widowhood, career changes, or inheritance.
- Optimizing Social Security claiming strategies and tax-efficient withdrawal plans for retirement.
- Stress-testing your retirement plan against scenarios like early market downturns, inflation spikes, and living to 95.
- Staying up-to-date with tax law changes every year.
- Reducing capital gains tax to help you keep more of your investment gains.
Start Building Your Investment Plan With ARQ Wealth
Whether you’re investing for the first time, getting back on track after a career break, or planning for a retirement that could last 30 years, ARQ Wealth is here to help.
Our team of investment professionals helps build comprehensive investment strategies that balance short-term security with long-term growth.
Our goal is to empower our clients to achieve their financial goals through prudent, customized wealth management strategies that prioritize their long-term success.
Schedule a free consultation with ARQ Wealth today or call us at (480) 214-9572 to start putting your money to work.
Frequently Asked Questions
Is investing different for women than for men?
The mechanics of investing are the same. But the financial circumstances women navigate, including lower average earnings, career interruptions, and longer life expectancies, require more intentional planning.
Women often need to save and invest more aggressively to reach the same retirement goals as men, which is why a tailored investment strategy matters.
How much money do I need to start investing?
You can start with very little. Many brokerages have no account minimums, making it very easy to get started.
What if I took a career break? Is it too late to start?
It’s never too late.
If you’re returning to the workforce or restarting your investment plan after a break, focus on maximizing retirement contributions (including catch-up contributions if you’re over 50), taking advantage of spousal IRA options if applicable, and building a diversified portfolio matched to your timeline.
Should I work with a financial advisor?
Working with a financial advisor can be highly valuable, regardless of which investment phase you’re in.
If you are just starting out, an advisor can help you create an investment plan from scratch to reach your goals. If you already invest, an advisor can help fine-tune your strategy and hold you accountable.