Wealth Strategies for Women: Navigating Earnings, Longevity, and Legacy

By Carol Powell, Senior Vice President & Senior Portfolio Manager and John J. Petracco, Senior Vice President & Senior Portfolio Manager

Women are playing an increasingly important role in the creation, management, and transfer of wealth.

Some are building businesses, leading organizations, and accumulating wealth through their careers. Women are also expected to inherit approximately $62 trillion by 2048 as part of the Great Wealth Transfer, according to Cerulli Associates.¹

Those opportunities are often accompanied by important financial decisions involving retirement, family, caregiving, philanthropy, and the legacy you hope to leave behind.

Financial Considerations That Can Shape Long-Term Outcomes

Although every woman’s financial situation is unique, several common factors can shape long-term wealth accumulation²:

• Longer life expectancies often require retirement assets to support an extended time horizon while covering higher healthcare and long-term care costs.
• The gender pay gap can reduce lifetime earnings and make it more difficult to accumulate retirement savings.
• Caregiving-related career interruptions may limit earning potential, reduce retirement contributions, and slow long-term wealth accumulation.
• Widowhood, divorce, and inheritance often place women in the role of primary financial decision-maker later in life, requiring careful planning and wealth management.

Prioritizing Lifetime Wealth Accumulation

Building wealth involves both earning income and making thoughtful choices about how you save, invest, and put that income to work.

Decisions related to compensation, retirement contributions, equity awards, and investments all play a role in determining how wealth grows.

Depending on your goals and financial circumstances, you may consider:

• Negotiating compensation packages, bonuses, and equity opportunities to ensure your earnings reflect your value.
• Optimizing contributions to employer-sponsored retirement plans and other tax-advantaged savings vehicles.
• Funding a Health Savings Account (HSA) to accumulate tax-advantaged assets for current and future healthcare expenses.
• Taking full advantage of executive compensation programs, deferred compensation plans, stock options, and other employer-sponsored wealth-building opportunities.
• Investing bonuses, inheritances, and other windfalls rather than allowing lifestyle inflation to absorb them.
• Maintaining a diversified, long-term investment strategy designed to support growth through changing market conditions.

Planning for Career Transitions and Caregiving Years

Because women are more likely to take career breaks or reduce work hours to care for children or aging parents, they often face additional challenges in building retirement savings and maximizing future benefits.

To help maintain progress toward long-term financial goals during caregiving years:

• Establish a dedicated reserve fund to cover future expenses without disrupting long-term investments.
• Continue retirement plan contributions whenever possible, even during periods of reduced income.
• Explore a spousal IRA if you are married and filing jointly, which may allow retirement savings to continue growing even if one spouse is not currently earning income.
• Maintain your professional networks, certifications, and skills to support future career opportunities and lifetime earning potential.
• Secure appropriate disability, life, and long-term care coverage to help mitigate financial risks and protect your family’s future.

Investing for the Long-Term

As your financial responsibilities grow through career success, inheritance, widowhood, or divorce, building a strong investment foundation often involves:

• Working with a trusted fiduciary to ensure your portfolio reflects your goals, risk tolerance, and tax situation.
• Maintaining a diversified portfolio across asset classes and markets to help enhance long-term resilience.
• Regularly rebalancing your portfolio as circumstances, priorities, and market conditions change.
• Keeping adequate liquidity to help ensure that short-term needs do not disrupt your long-term investment strategy.
• Staying focused on long-term objectives rather than reacting to headlines or market fluctuations.

Protecting What Matters Most

For many women, wealth planning extends beyond growing assets to protecting loved ones, preserving family values, and creating a meaningful legacy.

Speak with your estate planning team about how you can:

• Preserve family wealth and promote family harmony through clearly drafted wills and trusts that establish how assets should be managed and distributed.
• Minimize potential estate, gift, and generation-skipping transfer taxes by using strategies such as irrevocable trusts, lifetime gifting programs, and charitable vehicles.
• Maintain greater control over how and when assets are distributed through trust provisions that tie distributions to specific milestones or circumstances.
• Support philanthropic goals by incorporating charitable trusts, donor-advised funds or private foundations into your broader legacy strategy.
• Clearly document healthcare, financial, and end-of-life wishes through powers of attorney, healthcare directives, and living wills.

A comprehensive estate and trust plan can help ensure your wishes are honored while providing security and continuity for future generations.

Women, Wealth & Legacy

Women are expected to play an increasingly significant role in the future of wealth ownership and decision-making. This responsibility often requires managing multiple priorities at once.

A thoughtful financial plan can help provide clarity around those priorities and the decisions that accompany them – whether that means preparing for a career transition, caring for family members, managing an inheritance, planning for a long retirement, or creating a meaningful legacy.

Sources

¹ https://www.cerulli.com/press-releases/cerulli-anticipates-124-trillion-in-wealth-will-transfer-through-2048

² https://www.northwesternmutual.com/life-and-money/women-and-retirement-6-challenges-women-need-to-plan-for/ | https://thebiondogroup.com/mind-the-gap-addressing-the-financial-challenges-women-face/