Women and Wealth Building: Breaking Down the Gender Wealth Gap in 2025
Lisa gets a ping on her phone, alerting her that her pay statement is ready. She’s been working hard at her job and has tried to save when she can, but having two young children at home makes staying late at the office near impossible. She wants to take investing and wealth building more seriously but feels like there is always another obstacle—either at work or at home—that stops her from doing so.
Lisa’s experience isn’t unique. Despite significant advances in workplace equality, women continue to face unique financial challenges that impact their ability to build wealth.
These factors compound over time, creating a retirement savings gap that can reach hundreds of thousands of dollars.
However, understanding these challenges represents the first step toward overcoming them. With strategic planning, informed decision-making, and proactive wealth-building strategies, women can achieve financial independence and security.
Defining the Gender Wealth Gap
To understand the full picture, it’s essential to clarify the key terms that shape women’s financial landscape. The gender pay gap refers to women earning less than men. Studies show women earn approximately 83 cents for every dollar earned by men in comparable positions.
The gender investment gap describes the lower rate at which women participate in investing compared to men, often driven by an investment confidence gap. Research shows that while women are often making every day financial decisions, they are not as confident in managing investments and creating a diversified portfolio. Surveys found that women are approximately twice as likely as men to report having no investing knowledge.
Moreover, the motherhood penalty is evident. Women are more likely to be primary caregivers in their household, which can push them into focusing on unpaid family responsibilities, rather than career and income growth. Being a working mother can affect pay, perceived competence, level of commitment to careers, and professional employment benefits.
The Current Financial Reality for Women
Recent data reveals a complex but encouraging story about women’s wealth accumulation. Between 2018 and 2023, while global financial wealth grew by 43%, women’s wealth increased by 51%. In the United States and European Union, women now control approximately one-third of all retail financial assets, with projections showing this share could reach 40 to 45% by 2030 according to McKinsey research. These positive trends demonstrate that women are making significant strides in wealth building.
While women are making strides in their financial development, substantial challenges persist. The gender pay gap remains a foundational obstacle, limiting the capital available for saving and investing. Career interruptions significantly compound this issue, affecting women’s earning potential and retirement savings in multiple ways.
Each year away from work doesn’t just mean lost current income; it also means missed promotions, reduced Social Security benefits, and fewer years of retirement contributions. These interruptions, often related to caregiving responsibilities for children or aging parents, create cascading financial effects that extend decades into the future.
The key challenge is bridging the gap between capability and confidence, encouraging more women to participate in investing despite initial hesitation.
Strategic Career Planning for Wealth Building
Women must be particularly strategic about career planning to maximize earning potential and minimize the impact of potential career breaks. Choosing fields with strong growth prospects, flexible work arrangements, and clear advancement paths can significantly influence long-term wealth accumulation.
Build multiple income streams when possible. Consulting, freelancing, or developing passive income sources can provide financial security and continued earnings during career transitions. Many successful women entrepreneurs started side businesses while maintaining traditional employment.
Network strategically and seek mentorship from other successful women. Women who have navigated similar challenges can provide valuable guidance on career advancement, salary negotiation, and work-life balance. Professional organizations and women’s networking groups offer excellent opportunities to build these relationships.
Investment Strategies for Women
The investment confidence gap represents one of the most significant barriers to women’s wealth building.
Start with education. Understanding basic investment principles can boost confidence and improve decision-making. Thoroughly research investments before committing, which can lead to better outcomes than impulsive trading.
Read financial publications, attend seminars, and consider working with financial advisors who understand women’s unique challenges. Knowledge builds confidence, and confidence leads to better financial decisions.
Planning for Career Breaks
Rather than viewing potential career breaks as obstacles, plan for them strategically. This preparation can minimize their financial impact and facilitate smoother transitions back to work.
Build substantial emergency funds before taking planned career breaks. Financial experts typically recommend 3-6 months of expenses, but women planning career breaks might need 12-18 months of savings to provide adequate flexibility.
Maintain professional connections during career breaks. Technology makes it easier than ever to stay connected with industry developments and former colleagues. Consider part-time consulting, volunteer work in your field, or pursuing additional certifications during career breaks.
Explore options for continuing retirement contributions during career breaks. If your spouse has earned income, you may be eligible for spousal IRA contributions. Self-employment income from consulting or freelancing can also enable continued retirement savings.
Negotiate return-to-work arrangements before taking breaks when possible. Some employers offer phased returns, flexible schedules, or remote work options that can ease the transition back to full-time employment.
Building Financial Confidence
“Women often underestimate their financial capabilities, but they possess many qualities that lead to investment success,” says Natalia Walker, Vice President of Investments at David Lerner Associates, Inc.
“The key is building confidence through education and taking that crucial first step. Women who work with financial advisors often see dramatically improved outcomes because they receive both technical guidance and the encouragement to think bigger about their financial goals.”
Start where you are, not where you think you should be. Every woman’s financial journey is unique, and comparison with others can be counterproductive. Focus on your progress and celebrate milestones along the way.
Don’t let fear of making mistakes prevent you from taking action. The biggest financial mistake is often inaction. Start with small steps: maximize employer matches, build emergency funds, and begin investing in diversified funds. You can always adjust strategies as your knowledge and confidence grow.
Material contained in this article is provided for information purposes only. It is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. These materials are provided for general information and educational purposes, based on publicly available information from sources believed to be reliable. We cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. The subject of this article is fictitious and created for illustrative purposes only. It is based on events of a similar nature and should not be interpreted as a direct depiction of any specific individual, organization, or incident. Any resemblance to actual persons, living or deceased, or actual events is purely coincidental.