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One of the most important steps to take in closing the wealth gap between genders is to recognize the various differences between men and women. That includes more than just the wage gap — it’s the time that many women spend out of the workforce to care for their families and women’s longer average lifespan, to name a few.

All of these factors affect women’s overall wealth and financial well-being. And when it comes to investing, they’re important considerations for building a strong and smart strategy. So, let’s take a closer look at the unique obstacles women in the workforce face — and how they can tailor their approach to make the most of their investments.

Women face unique challenges.

While slowly narrowing, the wage gap between women and men presumably still has decades to go before closing completely. Currently, on average, a woman earns 79 cents for every dollar a man earns. When looking at women of color specifically, that numbers drops to 74 cents — and even lower in certain fields and locations and for different ethnicities.

This number alone is significant, but it’s important to consider the even bigger impact this difference has over a lifetime. Those 21 cents per dollar end up costing women a fifth of what they could earn over the course of their career. And that’s not even considering discrepancies in raises and career growth or time taken off for parental leave and care-giving.

Women are far more likely than men to take time out of their careers not only to care for and raise children, but also to provide care for their parents or spouses. Due to these career breaks, the average woman actually spends 44% of her adult life out of the workforce — compared to 28% for a man. And many women who take parental leave face missed opportunities or lower salaries upon returning to the workforce.

This time adds up. Not only can it mean months or years with slowed or paused income, it also means fewer years to take advantage of employee retirement benefits, like company 401(k) matching. Plus, time out of work can also negatively impact Social Security benefits during retirement.

Compounding the need for even larger retirement savings? The fact that women live an average of five years longer than men. With longer lives comes longer retirement — and the need for more savings.

The typical retirement costs nearly $800,000, and while more than half of women would like to make it to age 100, 60% of women are afraid they’d run out of money if they were to live that long. Women also generally retire two years earlier than men. And their healthcare costs during retirement are far greater than men’s — nearly $200,000 more.

Getting Started With Investing

When it comes to investing, monetary returns know no gender. But for many women, the biggest challenge is starting to invest in the first place. And whether it’s due to lack of financial education or not having enough confidence to take on the potential risks, far fewer women are investing in the stock market than men — regardless of age.

Fortunately, investing is easier and more accessible than ever before. Whether you’re a brand-new beginner or a day-trading expert, a number of options exist for investors with all levels of experience. And with investment minimums of less than $100, many accounts have almost no barrier to entry.

Entering the market may be simpler than ever but having an investment game plan is still just as important. Especially if your retirement savings need bolstering. While being a man or woman may not directly have an effect on your investment strategy, other factors like income, investment goals, timeline, and risk tolerance do.

And gender may play a role on those things.

The first step for any investor is to define your goals. This helps guide your strategy and can influence which type of securities you invest in. For example, with long-term investing goals like building your nest egg, you may be able to invest in riskier equities since you have more time to recover should the market take a dip. If you have short-term investing goals (think: saving for a wedding in five years or buying a new home in 10), you might stick to more conservative securities, like bonds.

In general, men are known to take more chances and women are said to be more risk-averse in terms of their investments. And even though the term “high risk, high reward” is often thrown around, it’s not always the best guiding principle.

While making more trades and aiming to beat the market may seem like an opportunity to bring in higher returns in the short term, it can often be a costly strategy. Trades can often influenced by emotional investing — which means making investment moves that may not be the best choice in the long run due to momentary impulses. This can lead to an abundance of trading fees as well as missed opportunities for future growth.

Sometimes, a strategy with fewer trades and regular contributions to long-term holdings can be more beneficial when investing to grow a retirement fund or meet another financial goal. That’s because times of market volatility are typically shorter lived, and when looking at overall historical trends, markets have trended upwards. So, by holding investments steady during both ups and downs, you’re more likely to weather the occasional storms and see growth on the other side.

Investing in a Self-Directed Trading account gives you the freedom to buy and sell as you wish. If you go this route, remember to keep portfolio diversification top of mind. This means investing in a mix of difference securities, like stocks and bonds, to help protect against risk. Exchange-traded funds (ETFs) can be a great asset for adding diversification, too, since they hold a range of underlying equities within one investment.

The good news is, if you aren’t comfortable with making trading decisions or building a portfolio all on your own, you don’t have to. By opening a Managed Portfolio, your investments will be professionally monitored and re-balanced based on your goals and preferences — taking some of the tricky or technical decisions off your plate.

Many women are faced with challenges in the workforce regarding their salaries or taking necessary time out of the office. Both of these factors can slow retirement savings or even cause them to halt — making the future (and a longer lifespan) a nerve-wracking thought.

But investing in the market offers a gender-neutral opportunity to let your wealth grow through compounding returns, even if contributions slow. And with a tendency toward less risky investments, as well as the capability to practice plenty of patience, women should feel confident in their natural investment skills and ability to continue narrowing the wealth gap.

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