Are women very different when it comes to financial planning? The unequivocal answer is “Yes!” Why? Women tend to live longer than men, earn less, save less for retirement and have different insurance needs. They also tend to approach financial planning advice differently! The biggest single financial challenge Americans face is lack of retirement preparedness. These issues are especially acute for women.  (Note: Join us to learn more at the free “Women and Money” workshop on Weds Feb 29 (7:30-8:30 pm) at the Berkeley Heights Public Library. Please RSVP to the library at 908-464-9333).

Here’s a brief recap of some of the issues women face when it comes to financial planning:

1. Women live longer than men, but earn less. Women in the US live an average 5 years longer than men, but typically earn 23% less (5% less if it's an identical job). As a result, they have less retirement assets and a higher risk of outliving them. The difference is startling: women typically have 1/3 less money set aside for retirement than men. To counteract this, women need to stay in the labor force longer (if possible), save more and keep their employment skills up-to-date if they exit the labor market.

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2. Women have less for retirement for other reasons, too. Studies show women have lower 401(k) participation rates than men. Less than half of wage-earning women in the US participate in retirement plans. Women (more often than men) interrupt their careers to care for children, aging parents and grandchildren. Being a care-giver can save money, but comes at a huge cost if care-giving displaces a stream of income a woman gave up.

3. Women have different insurance needs.  Women who don't work nonetheless have economic value and need life insurance. This is particularly true if they’re caring for underage children at home. In the event of unexpected death, life insurance proceeds can be spent to pay others for their homemaking services (food preparation, child care, car transport).  Women also need long-term care insurance more than men since they live longer and often outlive their spouses. A trip to any assisted living facility or nursing home will confirm that the majority of residents are women. This insurance need will grow as people continue to live longer lives.

4. Women are more insecure about financial matters.   If married, women tend to delegate financial decision-making to their husbands (caveat: I'm not saying this happens all the time -- but it's common). When women absent themselves from financial decision-making, they suffer even more if their husbands predecease them. I often see women who don't know where key financial accounts are held, or what kind of planning their husbands had in mind. Newly widowed women are especially vulnerable to "advisors" who live on commissions -- and who don't necessarily disclose a conflict of interest when giving advice.  Transaction-based advice-giving often has a pattern that helps generate a commission: 1) identify a need (e.g. "financial help") 2) instill a fear (e.g. "running out of money"), 3) locate a product that "solves this problem" (e.g. an annuity) and 4) "close the deal."  I'm critical of this approach since I often find the client is confused or given insufficient information to make an informed decision.

5. Women are more receptive to advice because they worry more.  Since women are more insecure about financial matters, they tend to be more receptive to professional advice. It’s not surprise that women often worry more about financial issues because they are often are charged with the well-being of their families – or themselves if they live alone  In the coming decades, experts say women will control more than 50% of the wealth in the US. By contract, only 25% of Certified Financial Planner® Practitioners are female. This may produce a potential mismatch between the rising number of female clients and the number of female financial planners who personally understand the sometimes more intuitive approach women clients take.

Regardless of gender, I believe both male and female clients need “space” to discuss emotional issues that revolve around money. Studies show – time and again – that clients who are emotionally invested in a financial plan always have a higher success rate in terms of implementing their plan and realizing their goals. If you are female, and work with a financial advisor, make sure your voice is heard and your input is considered in the financial planning process!


Eve Kaplan is a Certified Financial Planner® in Berkeley Heights. Kaplan Financial Advisors is a Registered Investment Advisor in NJ and NY; it is a Fee-Only (no products sold, no commissions) firm. Eve’s firm provides objective advice/investment management for high net-worth individuals and small businesses (401k plans). Eve can be reached at 908-898-0549 or  Visit her website at