Facts are facts, and the facts say that women are awesome investors. 

Recent data from Fidelity discovered that when women invest, they tend to outperform their male counterparts by 40 basis points (0.4%).

Couple that with data from McKinsey, which estimates that women will control a significant portion of the $30 trillion wealth transfer from the baby boomer generation, and the future of money is looking female.

But for all of these “wins,” there will likely be some roadblocks along the way. As women continue to gain more financial control, they’ll want to watch out for these common investment mistakes. 

By sidestepping these hurdles, they’ll be able to enjoy their wealth and leave a legacy for future generations. 

From preparing for longer life expectancies to navigating healthcare to weathering unstable markets, we’ll discuss four important investment mistakes women will want to avoid on their way to financial independence. 

Mistake #1: Not Planning For A Longer Life

On average, women live longer than men—and it’s not by a small margin. 

The most recent CDC numbers indicate that women tend to live an extra 5.7 years as compared to men. That’s nearly 6 extra years of living expenses, healthcare costs, insurance, taxes, entertainment, and more. 

This extended longevity means that women need to prepare for longer lives. But how can they do that when the wage gap is still prevalent (up to 93 cents on the dollar) and the fact that women are more likely to take time away from full-time work to raise children or offer caregiving to loved ones?

Don’t worry; hope is not lost!

Here are some things women can think about to plan for living longer:

  • Start investing early and often!
  • Negotiate for higher pay and/or better benefits
  • Create a custom withdrawal plan that balances sustainable distributions and risk.
  • Invest to protect against inflation
  • Maximize Social Security and other guaranteed-income measures. 

Striking a balance between these core strategies will help women build the income they need for a longer and happier life. 

Mistake #2: Forgetting About Increased Healthcare Expenses

Healthcare is already expensive and costs don’t show signs of waning. 

Planning for ballooning healthcare costs is another concern for women, especially since they are more likely to live longer. In fact, Fidelity found that a woman can expect to spend about $165,000 on medical costs alone throughout retirement—$15,000 more than a man. 

Beware, that number doesn’t include long-term care costs. According to the annual Genworth Cost of Care Survey, you can expect to pay about $54,000 a year for assisted living, $108,408 a year for a private room in a nursing home, or $61,776 for a home health aide. 

So how can women plan for these rising expenses?

  • Save for health expenses in an HSA. A Health Savings Account offers triple tax benefits (tax-free contributions, growth, and qualified distributions) and encourages long-term growth since the funds roll over each year. You can invest in an HSA if you have a high-deductible health plan. 
  • Select the right Medicare coverage (when the time comes).
  • Look into long-term care insurance to help cover costly expenses down the line.
  • Keep investing!

These costs are just a snapshot of key retirement health care expenses. Considering their high costs and unpredictable nature, health care projections should be a part of your long-term financial strategies.

Major medical expenses can easily wipe out retirement savings, but there are many strategies to help avoid outliving your money. We can work together to build a plan that addresses your present and future medical needs without adversely affecting your retirement lifestyle. 

Mistake #3: Letting Emotions Take Over Investment Decisions  

Even though we want them to be, investments aren’t always logical. That’s because we’re all human, and sometimes, our emotions stand in the way of us making the most logical choices. 

When markets swing, emotional decision-making can wreak havoc on even the most carefully designed investment plan. Many investors lost money in the mortgage meltdown of 2008. Some even cashed out near the bottom, fearing the markets themselves were collapsing. 

Not only did these investors lose money by selling low, but if their money is still sitting on the sidelines, then they’ve missed out on the financial recovery as well. 

While the markets have rebounded since the 2008 crash, the importance remains of avoiding irrational, emotional choices. When major investment decisions are only a click away, many investors give in to their fears or exuberance, and they could pay the price for this short-term thinking. 

Data from the Bank of America illustrates that staying in the market through the ups and downs can significantly impact net returns—17,715% by staying invested and not missing the S&P 500’s best days!

But staying in the market is challenging for every investor. 

Where women face unique concerns is how they view their own investment habits. A Nerdwallet survey found that women reported being more anxious, confused, and afraid when thinking about their investments as compared to men. This study also revealed that women were less confident, excited, and proud than men regarding their investments. 

But even though women might not be as confident, they have great investment instincts. The same Fidelity study from above shows that they’re more goal-driven, long-term focused, and willing to ask for help. 

One of the major benefits of working with our firm is that it is our job to act as the voice of reason when emotions run high. When markets decline, remember that we are always available to answer questions, provide reassurance, and show you the opportunities that volatile markets provide. 

Mistake #4: Trying To Go It Alone 

Receiving advisory support from a professional planner can be a valuable tool as it may guide you toward decisions regarding your retirement planning goals. 

But it’s challenging to a) find the time to research the type of planner you need and b) work with someone you trust.

There are so many benefits to entrusting your wealth-building journey with a financial advisor. An advisor who looks at your comprehensive financial picture can help you with various financial needs including:

  • Investment selection and ongoing management (learn more about our core investment principles and how they help you here).
  • The setting, tracking, and achieving of your financial goals
  • Ensuring your wealth is protected with the right insurance, guaranteed income, cash buckets, and other sources.
  • Proactive tax planning
  • Estate planning
  • Family financial planning (college/education, etc.)

Having access to the professional insight and resources you need to make sense of your financial life, and support long-term strategies can make a big difference in your ability to retire your way. We educate our clients on the opportunities market volatility provides, and we keep those clients focused on their long-term goals — not on short-term fluctuations. 

As financial planners, we spend our careers charting courses through turbulent markets, and it’s our job to stay on top of ever-shifting economic, financial, and legal issues so that our clients don’t have to. By making time to create financial strategies and choosing to have guidance from professionals, women can more effectively overcome the odds stacked against them. 

Leaving a Legacy For Future Generations 

One of the rewards for hard work and effective wealth management is the joy of providing for your loved ones and the causes you care about. 

We have found that, as individuals and couples move into retirement, they begin to think more practically about the legacies they want to leave behind. With women commonly outliving their spouses, they are increasingly responsible for the final disposition of family assets. As a result, it is important to discuss in advance your family’s estate planning goals. 

One of the greatest gifts you can leave your family is a life well lived— one full of love that serves as an example to others. While you take steps toward controlling your financial destiny, remember that the women in your life will look to you for support in their financial lives. As part of your legacy, you can help pass down the need for building financial wellness to the other women in your life. 

By setting this example and building a legacy that reflects your values, you can focus on leaving the world and the people you care about a little better than when you got here. 

Contact us today so we can help plan for your financial future!

Women investors face many challenges to building wealth and securing their financial futures. We developed this resource as a guidebook for women who are seeking perspectives on how to take control of their financial lives. We hope you find useful information that helps you make the most of your financial well-being today and every day.

Click below to download and continue reading our guidebook for women and investing.




The contents of this article are for general information and educational purposes and should not be construed as specific investment, financial planning, tax, accounting, or legal advice. Please consult with a professional advisor before taking any action based on the contents of this article. 

All investment and financial planning strategies involve risk of loss that you should be prepared to bear. We cannot guarantee any investment performance whatsoever, and past performance is not indicative of potential future returns.

Originally published: 5/2017

Updated: 7/2022