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For decades, the investment world has been disproportionately shaped by male perspectives and experiences. From the glossy advertisements to the clubby Wall Street career pathways, the financial services industry has catered primarily to men’s needs and mindsets. But that antiquated reality is finally shifting.

Today, women’s economic influence and financial decision-making power have swelled to unprecedented levels. They control a third of total U.S. household wealth, of $11 trillion. Many are their household’s chief investment officers, managing not just their own finances but their family’s too. And within a generation, women are expected to hold two-thirds of that wealth in their hands as the great transfer of inheritance unfolds.

Yet investing has always been a more complex journey for women than their male counterparts. The persistent gender pay gap, career interruptions to care for children or aging parents, and longer lifespans creating bigger retirement savings needs – these are just a few of the unique financial hurdles women face. Without accounting for those realities from the outset, the mainstream investment advice women often receive misses the mark.

As women’s economic power and self-directed investing levels continue surging, the financial industry must urgently evolve. Wealth management firms, digital investment platforms, financial advisors themselves – all will need to upgrade their products, education and messaging to empower women investors for long-term success. Here’s a look at the smart investment approaches, at different life stages, that address women’s distinctive money needs and mindsets:

In Your 20s: Make Every Dollar Count
For young career-starters, the gender pay gap weighs heavily. Women just one year out of college make $3 less per hour than their male peers. Over a 40-year career, that adds up to nearly $380,000 in lost potential investing capital for women. The unfortunate reality? Women must amplify every investable dollar from the very start.

Top Priority: Get lean, tax-advantaged retirement accounts like a 401(k) or Roth IRA funded now. Those extra years of compounded returns cannot be underestimated. For investors with limited means early on, low-cost index funds are a simple, diversified strategy that capitalizes on market returns while fees remain miniscule.

Another vital tactic is negotiating hard for that first salary – women only ask for a raise 7% as frequently as men at work. A small upfront difference can meaningfully increase lifetime earnings potential and savings capacity.

Throughout Your 30s: Protect Your Human Capital
For women in their 30s juggling careers and growing families, proactive planning is the name of the game. With increased financial responsibilities like mortgages, child costs and saving for their kids’ educations, focusing intently on protecting their household’s “human capital” – that is, their present and future earnings abilities – will pay dividends.

Priorities: Maximize earnings growth and carefully navigate any potential career interruptions. Experts recommend women have 6-12 months of living expenses as an emergency fund, plus adequate disability and life insurance. Low-cost term policies can provide an affordable safety net for dependents.

Women should also seek to take maximum advantage of their employer’s retirement match benefit (many don’t) to accelerate tax-deferred savings growth. But particularly for those taking family leave, contributions to spousal IRAs can make up for lost retirement savings years later.

In Your 40s: Close the Confidence Gap
Many women approach their peak earning and saving years in their 40s. However, they often exhibit lower confidence in their investment knowledge and decision-making abilities compared to men – a tendency that can limit wealth-building opportunities.

Priority: Don’t ignore low-cost help. Financial advisors remain overwhelmingly underutilized by women, with fewer than 4 in 10 women using one. But the right advisor, with a firm grasp of their client’s goals and tolerance for investing risk, can provide invaluable guidance around tax efficiency, proper asset allocation, and disciplined portfolio rebalancing – potentially boosting net returns over the long run.

Women should embrace their tendency toward lower-risk investment strategies and longer time horizons as assets rather than shortcomings. With patience and reasonable expectations, those attributes can generate strong growth while avoiding disastrous losses.

Your 50s and 60s: Transition Intelligently
By their 50s and 60s, most women have amassed sizable investment assets – whether in tax-deferred retirement accounts, real estate holdings, or non-retirement portfolios. But this pre-retirement phase can trigger unanticipated new money challenges to navigate carefully, like paying for children’s weddings or college tuition, supporting aging parents, or wisely positioning their portfolio for the next stage.

Priorities: Smart tax planning and drawdown strategies should top the agenda well before actually retiring. Intelligent account sequencing – utilizing taxable brokerage accounts first, allowing tax-advantaged retirement funds to continue compounding – is just one tactic that can materially enhance lifetime portfolio spending capacity.

With women’s longer life expectancies, annuities can be smart tools converting a portion of retirement assets into guaranteed lifetime income – insulating against longevity risk and sustainable spending needs. Healthcare costs like long-term care insurance should also be proactively reviewed.

The Road Ahead
Women may face a more complex set of financial circumstances than their male counterparts. But through proactive planning, smart investment behavior tailored to their distinctive needs and mindsets, and a refusal to let gender-normed biases dictate their path, women have an enormous opportunity to turbocharge their long-term wealth creation and secure their financial futures.

With advancing gender equity and economic progress, the balance of wealth held by women will inevitably continue its ascent at a rapid pace. For any forward-thinking investment firm that begins prioritizing women investors’ specific realities and decision-making needs today, that underserved segment represents a tremendous and fast-growing market opportunity. Those that double down on empowering female investors are optimally positioning themselves for success in the rapidly evolving future to come.

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