4 Reasons Why Investing is Necessary for Women

We already know that women earn less than men, but that’s not the only reason why women shouldn’t be waiting to invest their money. According to data from the Vanguard Center for Investor Research, women often have retirement balances that are half the size of men (source). 

In order to support yourself for however many years you’ll have in retirement (and it will keep increasing as we live longer), investing now in preparation is essential. We may not be able to close the gender pay gap right away, but taking action with your investment portfolio now is something you can easily do now to close the investing gap and safeguard your future.

It may sound basic, but retirement isn’t an age you arrive at and then you just “get” to retire. To start with, living longer means you can have a really vibrant life and continue working (if you want) well beyond 65 years old. But the key thing to bear in mind is that you can only retire if you have enough money to support your lifestyle for the next 30 or more years.

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Here are four reasons you need to start investing, like, yesterday:

1. Women often outlive men

On average, we outlive our male peers by 6 years. And when you factor in the stat that 2 in 10 millennials will live to be over 100 years old, you have to prepare for that longevity so that you can live comfortably during your golden years.

2. Healthcare costs are getting higher

A 43-year-old woman today will spend approximately $200k more in her retirement on health insurance compared to a man. And if you factor in inflation, that figure is likely over $200k for millennial women in the U.S. (source: Business Wire)

3. Savings alone won’t secure your future

A savings account isn’t growing your money and shouldn’t be relied on as the primary savings vehicle for retirement. Due to the erosion effect of inflation (when the inflation rate exceeds the interest earned on a savings or checking account), keeping money solely in savings will actually make you lose money if it’s not bearing interest of more than 2%. (source: Investopedia)

4. Building generational wealth

Investing your money is a good way to safeguard your own future, but also the futures of the people you love. If you have children or plan to have them, it’s a good idea to start investing now, so that you have a nest egg to help with their college tuition or create more opportunities for them.

This list is not exhaustive and is just a handful of reasons why investing is essential for women. You cannot afford (literally!) to procrastinate any longer, so next time you review your finance and spending plans, think about some of the ways you can build investing into your plan.

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