You’ve heard of the gender income gap, but do you know what the gender wealth gap is? At the end of their careers, according to U.S. News & World Report, women lag behind their male counterparts in retirement savings to the tune of $1 million.
In part, it’s a result of women earning less on average than men in similar jobs. However, that’s not the end of the story. Fidelity investments found that women tended to keep more than 70% of their wealth in cash as opposed to more aggressive investment choices that could potentially earn them higher returns.
Interestingly, they also found that when women do invest, they earn on average .4% higher returns then their male counterparts. This statistic points to one potential strategy for women to begin closing the gap. That is, they may need to become more comfortable making more aggressive selections in their retirement portfolios. Many women would also benefit by investing more of their income and starting to invest earlier.
Closing the gender wealth gap is important beyond its sociopolitical ramifications. Solving this problem has important practical implications for women as well. Because they tend to live longer than men on average, women will also need more resources to live out their retirement years comfortably.
Women tend to be more focused on goal-based investing as opposed to “beating the market.” Becoming crystal clear on financial needs and goals can help women set more realistic expectations for their future.
Setting a plan with your financial advisor is a great place to start (for both women and men). Don’t be afraid to raise questions or ask for a clarification during the meeting if you need one. Take notes during your appointment, and contact your planner with any follow-up questions that may arise after you’ve had more time to reflect.
Financial planning and investing has its roots in a historically male-dominated industry. And the topic is still underrepresented in many women’s magazines and publications. It’s important for women to take control of their financial futures by seeking out the information they need and being proactive with respect to their retirement planning.
Fear and risk are frequently antithetical. Often, the more information you have, the less fearful you are. End it often takes overcoming a little bit of fear to get into the market and to invest aggressively enough over time to meet your financial goals.
Tips to help close the gender wealth gap:
It’s critical that women feel empowered to take charge of their finances and retirement planning. And it’s never too early to start the conversation with daughters about debt, investing, credit, retirement and all other aspects of financial wellness. If we start doing that across the board, hopefully before long, the gender wealth gap will exist only in the past rather than in any woman’s financial future.
Sources:
Perhaps you’ve lost a job, faced an illness or have been delt a family crisis that emptied out your emergency fund. What are your next steps?
You’re eyeing center-hall colonials in your neighborhood and dreaming about the garden you want to plant in the backyard and all the holiday celebrations you’ll host. You’ve saved toward this goal and think you’re ready to pull the trigger. But the real question is: How much house can I afford?
Or is it?
Social Security’s financial cliff is coming closer into view. Experts project that the fund that pays for government retirement benefits through FICA taxes will be depleted within the next 15 years.
© 2026 The Participant Effect. All rights reserved.
