Smart Wealth Planning for Women at Every Age and Stage

Women have made great strides in earnings! In almost one-third (29%) of opposite-sex marriages, wives earn as much as their husbands, up from 11% in 1972.¹ Additionally, 16% of wives are the main earners in their families. Despite this progress, women still face financial challenges, including the gender pay gap, longer lifespans, and career breaks for caregiving. That’s why it’s crucial for women to focus on managing their wealth and mastering their financial independence. If you’re a woman, it’s a matter of when you need a plan, not if.

You can take steps now to help improve your financial success — regardless of your age, life stage, household, or marital status — and help advance a plan to high-net-worth (at least $1 million in liquid assets)². Even minor changes you make today can have a significant impact on your financial future.

These life-stage checklists can serve as a guide for developing a financial plan:

20s

• Put money into the stock market — in addition to a savings account. Women are more likely to leave their savings in cash because they are often less confident investors than men. It is important to invest in the stock market to add a buffer against inflation; stocks are likely to keep up better with inflation over time than cash. Determine how much you need on-hand for emergency cash reserves before you invest a portion of your income. Consider a variety of securities based on your investment time horizon and objectives. Educate yourself on investing or hire a financial advisor — it’s not too early.
• Invest now and regularly, even with a small amount. When it comes to investing, your time horizon (how long you’re in the stock market) is imperative. A small investment made in your 20s can grow exponentially over decades due to growth potential and compounding, which is the interest you earn on the investment as well as any increase in value. The younger you start investing, the more time your investments will have to grow throughout your lifetime. Set some money aside to invest each month, whether it’s $10 or $1,000. You can set up direct deposits into a brokerage account from your paycheck or checking account. Also take advantage of your employer-sponsored retirement plan if you have one.
• Make paying off debt a priority. If you’re putting too much of your income towards minimum required monthly payments for debt, you may have too much bad debt. Organize all your debt by annual percentage rate (APR) and pay down the highest percentages first.

30s

• Max out your 401(k). You can save up to $23,000 from your paycheck in 2024 (the IRS will likely change the limit in following years) into a 401(k) account sponsored by your employer. For traditional 401(k)s, the contribution is pre-tax, and you don’t pay taxes on it until you take distributions. For Roth accounts, contributions are after-tax, but withdrawals in retirement are tax-free. If your company matches your contributions, contribute at least that amount, but keep in mind that maximizing contributions is the goal for your 30s and can set you up for a more secure retirement.
• Save additional funds in a brokerage account. While it’s important to save for retirement in your 30s, it’s also important to set money aside for emergencies. Liquidating funds from retirement accounts for an emergency before age 59½ could decimate savings with hefty tax penalties, so use emergency savings from an account not that’s not bound by retirement tax regulations, like your brokerage account where you started investing in stocks, bond, mutual funds, or ETFs in your 20s. If you’re not confident about investing, consider hiring a financial advisor.
• Consider 529 savings plan for kids. Initially created to save for kids’ college expenses, a tax-advantaged 529 savings account can now help you fund your children’s private K-12 education or an apprenticeship. Like a 401(k) account, the savings in a 529 are invested so they will grow over time without being taxed, and qualified withdrawals are not taxed. Since 529s are administered by each state, the contribution limits vary. Considering the increasing costs of education and unknown events that may occur in your life which could limit income, this can be a smart decision when your kids are young, helping with future wealth management.
• Make a will. Whether you have kids or not, get a will. This is something people delay because it’s a heavy conversation to have with loved ones, but a will and other documents, like a power of attorney or a trust, should be part of your estate plan. In addition, review your insurance coverage and ensure your accounts have beneficiary designations. If you invest in cryptocurrency, verify that your beneficiaries have access to your proprietary phrases, login information, and digital wallet addresses.
• Rethink your saving and spending. You may be making two or three times more than you did in your 20s. Have you increased your savings accordingly or are you spending the extra income? Manage your cash flow by creating a reasonable spending plan that helps ensure money is going where you want. Beware of lifestyle creep.
• Negotiate to increase your position and salary. Your boss can’t read your mind. Advocate for yourself and what you are worth. It might be scary to discuss salary, but most of the battle is simply asking. You’d be surprised how often you can receive a salary increase by inquiring. If your employer isn’t the right fit for your long-term objectives, consider changing jobs. You could become one of the nearly 11% of female CEOs of Fortune 500 companies.³
• Become independent. It’s important to have your own money set aside. Whether you’re single or married, it’s wise to establish an account in your name that others can’t access. Focus on strengthening the credit rating solely in your name — independent from your spouse or partner — and check your Experian or Equifax credit reports monthly to review areas for improvement.

40s

• Plan, plan, plan. If you still don’t have a comprehensive wealth management plan, make it a priority. It’s a suitable time to think about hiring a financial advisor if you don’t have one. You’re likely making more money, spending more on kids, accumulating more assets, and planning for the future. Connecting all the dots becomes crucial.
• Continue achieving financial independence. Strive for financial independence from your partner if you didn’t do it in your 30s. Women in their 40s are in a particularly important decade when it comes to financial planning. Create two financial plan scenarios if partnered: one together and one as a single (in the case of divorce or death of your partner).
• Manage your cash flow — selfishly. Ensure you are on the right track for the cash flow you will need in retirement. The most common goals for women at this stage are paying off the mortgage, providing education for kids, and supporting future weddings for kids. We tend to focus on others. This is the time to make sure you are prepared for your retirement: Generally, if you have three times your current salary saved at 40, you are most likely in an acceptable position to be funding other goals. Make sure you know how your cash is flowing.
• Explore health savings accounts. Another tax-advantaged savings account to consider is a health savings account (HSA) which may be offered by your employer but stays with you after you leave the company. It allows you to prepare for rising health care costs as well as the potential increase in necessary medical care as you age.

50s

• Prepare to care for aging parents. Evaluate potential health expenses of aging parents. Since women of the family often become the caregivers of their parents, create a plan and review long-term care policies for potentially significant medical issues such as dementia and other disabling illnesses. This stage of life is often when you become part of the “sandwich generation,” so it’s important to prepare.
• Plan for retirement. You should be looking towards retirement at this stage. Women in their 50s typically experience several significant life transitions that can seem to occur all at once — preparing to send kids to college, dealing with care for aging parents, and downsizing or relocating after the kids leave the nest. But you also need to plan for your own retirement. Look at whether your 401(k) or IRA is tracking with your retirement goals. If you have a solid retirement plan, it can help with navigating forks in the road and retiring with confidence.
• Prepare for the unknown. Your 50s are a time when you may experience unexpected life changes. This is where insurance is important. Even if you have a life insurance policy through your employer, consider a separate policy for potential use as a wealth transfer tool for loved ones. Annuities might be a viable choice for you. Also, look into long-term care insurance to cover your medical needs in the future and to help reduce the burden on your family members.

60s

• Revisit the financial plan you made in your 50s. Are you on track? Are you employed, divorced, a caregiver of elderly parents, or a babysitter for your grandchildren? Write a summary of life choices, responsibilities, and dreams for this next chapter. Begin by updating your net worth statement and reassess when you want to retire and enjoy pursuing goals such as more travel or other endeavors. Evaluate your risk tolerance. Maybe you’ll want to invest in equities that pay dividends, are fixed income-based, and less growth-oriented. It’s not too late to hire a financial advisor if you want guidance.
• Evaluate when to collect Social Security. It might make sense to delay collecting Social Security or taking distributions from your retirement funds, but that depends on your personal financial situation and retirement plan. When unsure, it’s best to consult with a financial professional who can put together a plan that takes all income streams and tax implications into consideration.
• Update your estate plan. It’s important to control how your wealth gets distributed when you die and to protect your heirs from significant taxes. Be sure you have an up-to-date will or trust. Review your beneficiary designations for savings accounts and insurance policies. Consult with an estate attorney to ensure the proper documentation is complete.
• Consider philanthropy. In addition to supporting a cause you are passionate about, philanthropy and charitable giving can be done in a way that may help reduce your tax burden. The majority (85%) of household charitable giving decisions are made or influenced by women, but nonprofits still need more female board members.⁴ Your volunteer time is also valuable.

70s and beyond

• Employ the three pillars of financial planning. At 70, some women see wrinkles, gray hair, and extra pounds. But women are survivors who can age like classic cars or fine wines.

1. 1. Financial security. The most important considerations for general financial security are health care, Medicare or other insurance coverage, housing, and emotional support. While emotional support can come from family and community, a financial plan helps ensure you will have enough assets and insurance for security in any situation and for the long-term.
   2. Estate planning. Review all beneficiaries and estate documents every three years. A living trust will provide financial and other legal authority according to your wishes.
   3. Asset management. Take care to control your personal property, real estate, retirement funds, personal investment accounts, and cash. Ensure that your investments still align with your risk tolerance and your cash flow needs. Watch out for potential scams.

• Enjoy the fruits of your labors. Whether you started to focus on financial planning at a youthful age or later in life, you deserve to relax and enjoy. Taking care of your health and happiness should be your priority. The most important part of your financial success is having a plan. Pass on that wisdom to all the women in your life!

Financial independence and security can be a moving target during the various stages and circumstances of a woman’s life. Whether you’re a recent college graduate, nearing retirement, or enjoying retirement, you still need a financial plan.

If you want to ensure your wealth and legacy endure during and after your lifetime, let’s talk.

1.“In a Growing Share of U.S. Marriages, Husbands and Wives Earn About the Same,” Pew Research Center, April 13, 2023.

2. “High-Net-Worth Individual (HNWI): Criteria and Example,” Investopedia, June 8, 2024.

3. “The Data on Women Leaders,” Pew Research Center, Sept. 27, 2023.

4. “Charitable Giving by Affluent Households Above Pre-Pandemic Levels,” Bank of America, Oct. 3, 2023.

Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.

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