March is a time to celebrate the achievements and resilience of women around the world. With Women’s History Month in the U.S. and International Women’s Month recognized globally, this is the perfect opportunity to reflect on the progress women have made—and the unique challenges they continue to face, especially regarding financial security. Whether you are building your career, balancing work and family, or planning for long-term financial independence, understanding the financial considerations specific to women can empower you to take control of your future.
Women often navigate different financial realities than men—longer life expectancies, career interruptions for caregiving, and the gender pay gap all play a role in shaping financial security. That’s why thoughtful planning is crucial to ensuring long-term financial success. Let’s explore some key financial considerations that every woman should keep in mind.
Prioritizing Career and Salary Growth
Despite advances in the workplace, the gender pay gap persists. Women, on average, earn less than men, which can impact lifetime earnings, retirement savings, and Social Security benefits. Lower earnings reduce immediate financial stability and impact long-term wealth-building, making it crucial for women to take an active role in career and salary growth. Here are some key strategies to consider:
- Negotiating Your Worth – Many women hesitate to negotiate their salaries, fearing rejection or conflict. However, salary negotiations are a key factor in closing the earnings gap. Some tips for successful salary negotiation include researching the market rate for your role, experience, and location and considering the entire compensation package, including bonuses, stock options, additional vacation days, or professional development stipends.
- Investing in Professional Development – Investing in your professional growth can help ensure long-term career security and salary progression. Ongoing education and skill-building can open doors to higher-paying roles, leadership positions, and career shifts into lucrative industries.
- Exploring Other Income-Generating Activities –Relying solely on a salary from one job can limit financial growth. Women can build additional income streams through entrepreneurship, side businesses, strategic investments, and passive income streams.
Planning for Career Breaks
Many women take time away from work for caregiving—whether for children, aging parents, or both. These career interruptions can impact long-term earnings and retirement savings. Consider these steps to mitigate financial setbacks:
- Contribute to a Spousal IRA – If you are married, a spousal IRA allows contributions even if you’re not currently earning income. This can ensure that your retirement savings continue to grow even during career breaks.
- Plan for Healthcare Costs – Women generally have higher healthcare expenses. Consider contributing to a Health Savings Account (HSA) if eligible, as funds can grow tax-free and be used for qualified medical expenses in retirement. Whether through insurance, savings strategies, or asset protection trusts, planning ahead can help preserve wealth while ensuring you receive quality care in later years.
- Delay Social Security Benefits – While women can begin collecting Social Security at age 62, waiting until full retirement age (FRA) can result in significantly higher monthly benefits.
Protecting Your Financial Future with Insurance
Women often put others first, but protecting your own financial well-being is just as important. Key insurance considerations include:
- Life Insurance – Life insurance ensures that loved ones are financially protected in the event of your passing. Women often underestimate their need for life insurance, but it’s crucial if you’re a single mother and your children rely on your income, your family needs your income to maintain their current standard of living, or you are a stay-at-home parent, and your role has economic value, including childcare and household management.
- Disability Insurance – More than 1 in 4 workers will experience a disability before retirement; make sure you have coverage. If you rely on your paycheck to cover expenses, disability insurance is just as important as life insurance—it ensures you can continue meeting financial obligations if you’re unable to work.
- Health Insurance – Health insurance is essential for women at every life stage. It is one of the most significant financial protections you can have, helping cover medical expenses and unexpected health issues. If you’re self-employed or between jobs, explore options like a Health Savings Account (HSA) or COBRA coverage to maintain continuous healthcare access.
Closing the Retirement Gap
Women tend to live longer than men, meaning retirement savings must stretch further. Yet, many women save less due to lower lifetime earnings, the gender pay gap, and time away from the workforce for caregiving. These factors can result in a smaller retirement nest egg, making it essential to take proactive steps to close the gap and secure financial independence in later years.
- Maximize Retirement Contributions – If you have access to an employer-sponsored retirement plan, contribute as much as you can—especially enough to get the full employer match, if available. For those who are self-employed or work for companies without retirement benefits, an IRA (Individual Retirement Account) or a SEP IRA (Simplified Employee Pension IRA) can be powerful tools.
- Take Advantage of Catch-Up Contributions – Women approaching retirement should take full advantage of catch-up contributions, which allow those 50 and older to contribute more to tax-advantaged retirement accounts.
- Diversify Investments for Growth and Stability A well-balanced investment portfolio is crucial for ensuring long-term financial security in retirement. Many women tend to be too conservative with their investments, limiting growth potential and leaving them short on retirement funds. With longer life expectancies, women must ensure their retirement income keeps up with inflation.
Estate Planning: Securing Your Legacy
Regardless of your family situation, estate planning is a must. Women often outlive their spouses, making it even more critical to have a plan in place. Proper estate planning ensures your wishes are honored, your loved ones are taken care of, and your assets are protected.
- A Will and Trust – A will outlines how you want your assets distributed, while a trust can provide additional control, privacy, and tax advantages. A trust is beneficial if you have children, own a business, or want to leave assets to charities.
- Beneficiary Designations – Many financial assets, such as 401(k)s, IRAs, and life insurance policies, pass directly to named beneficiaries, bypassing probate. Regularly review and update these designations, especially after major life events like marriage, divorce, or the birth of a child.
- Power of Attorney and Healthcare Directives – If you become incapacitated due to illness or injury, these legal documents allow someone you trust to make financial and medical decisions on your behalf.
Take Charge of Your Financial Future
Women have made incredible strides in education, career advancement, and leadership. However, financial empowerment remains an area where many women can take stronger action. As we celebrate Women’s History Month, consider how you can lift other women financially. Whether it’s mentoring a younger colleague, supporting women-owned businesses, or contributing to charities that empower women, small actions can make a big difference.
By understanding women’s unique financial challenges and proactively planning for the future, you can create a secure financial path for yourself and those you care about. If you’d like to discuss your financial goals, Method Financial Planning is here to help. Let’s celebrate this month by taking steps toward greater financial confidence!
