Should Women Invest Differently from Men?

Girl, we already do!

In the news recently, there has been a lot of talk about the gender wage gap. According to the Bureau of Labor Statics, women earn $0.82 on the dollar compared to men. Additionally women spends 15% of their working years outside of the workforce caring for children and elderly parents compared to the average man’s 1.6%.

Women (in general) have a longer time horizon.  Women usually live longer than men (in the U.S. almost 7 years longer on average), so their retirement must last longer.  Due to the age gap, women will likely have more healthcare expenses.  Married women face the likelihood of outliving their partners.  It’s estimated that the average woman earned $1 million less by the time she retires than compared to a man.

On the positive side, according to research done by Warwick Business School, women’s return on investment was an average of 1.2% higher than men. Another study done by Fidelity found a less extreme gap of 0.4%.  Over a lifetime, still a significant advantage.

The reason? Women usually trade less and use buy-and-hold investing. They are also less likely to invest in stocks that are higher risk. Also, studies have found that women are less confident about their ability to invest which longer term can help them be better investors.  More research done, less snap decisions and more risk averse.

So, what’s the issue? Around 55% of women don’t know how much money they need to retire, and men contribute 32% more to their investment accounts. Women are also less likely than men to invest in something they don’t understand. Also, there are cultural factors. Most investment advisors are men and give advice based on their male perspective. Women are also told that if they have money spend it, which they do. About 70% of all buying decisions are made by women. The solution? On a macro scale, Wall Street needs to be more inviting to women in general. However, the personal solution is to get started. Become engaged and figure out what your goals are and should be.  Women’s Institute for Secure Retirement (WISER) has a lot of information and even a free retirement calculator at It might also be time to get an investment advisor, who can help you come up with an individual plan. If you’d like help with an investment strategy or financial plan, Westbourne would be happy to help!