Investing for Women:

Closing the Gender Investing Gap


Men contribute more of their annual income towards investments and retirement than women.1 Societal factors contribute to this gender investing gap, but there are steps women can take today as they work toward financial independence.

Here’s why the gender investing gap exists, and what you can do to mend it.

Why Do We Have a Gender Investing Gap?

Older women have about 80% of the retirement income that older men have.2 This gap exists primarily for three reasons:

The gender pay gap means there’s less to save.

In 2020, women earned $.81 for every dollar a man earned, according to one popular study.3 Because women make less money overall, they have less to invest, and it means putting a larger percentage of their paychecks toward investments.

The study also showed that women could make $900,000 less than their male counterparts3 over the span of a career. The gap is even more substantial if you consider the compound interest that might have been earned if those lost wages were invested.

Longer life expectancy requires more savings.

On average, women outlive men by several years.4 Time is a great gift, but you must plan for more out-of-pocket costs and day-to-day spending. If women are behind in investing, they'll have to catch up and surpass men to make up for the extra time they have. 

Caregiving cuts into income. 

One in eight parents between the ages of 40 and 60 are caregivers to both an aging parent and a child under 18.5 This “sandwich generation” phenomenon disproportionately impacts women: Women are more likely to take time off after the birth of a child, which can lead to wage stagnation. Additionally, 66% of all senior caregivers are women,5 which may result in more time off to care for aging parents.


The gender investing gap exists not only because women invest less on average, but also because of outside factors that prevent women from having as much to invest. But the gap is closing. It will continue to close as more women see how investing may boost their financial independence and future.

How You Can Close the Gap

Closing the gender investing gap can be as simple as putting together a plan and committing to it. Your dreams and goals are too important to be left to chance. A proactive approach to investing, no matter how big or small, puts control back in your hands.

Here’s how you can work to close the gap.

Set a Goal

When you start out to create an investment plan, it helps to know where you hope to end up. First, define your goals, such as saving for retirement. Use American Century’s retirement calculator tools to get the ball rolling. That will help you figure out how much you need to save each month to retire by a target date.

You also may have other goals you want to achieve while you're saving for retirement. Some people consider investing in exchange-traded funds (ETFs) or mutual funds as a way to potentially build wealth for nearer term goals. The key is to understand your objectives and timeline before committing to a strategy.

Build Your Portfolio

Once you know your goals, you can start building a portfolio. At this point, you should think about how much risk you want to take on. Assuming a little risk may help grow your investment faster, but it may expose you to larger losses.

You also want to think about how hands-on or hands-off you want to be with your investment strategy. With a hands-on approach, you need to decide how to invest your money. You'll want to consider spreading your money across several investment types that react differently when markets change. This is known as diversification, which may help you weather the market’s ups and downs.

If the idea of choosing where your money goes sounds stressful, there are hands-off investing approaches out there such as target-date and target-risk funds that are managed by experts, broadly diversified and conveniently packaged.

Follow Through

With a plan in place and a portfolio at the ready, all you need is follow-through. Instead of worrying about day-to-day market volatility, think about the long game of investing. Investments aren’t about how your money looks today, but what they may grow to years from now.

This is when tactics like automated investing can come in handy. When you automate investments every week or month, it’s one less thing to worry about, eliminating the fear of forgetting to invest or spending the money because it’s sitting in your checking account.

Schedule Check-Ups

Automated investing tools and asset allocation funds can do most of the heavy lifting for you, but you should check in with your portfolio periodically. These check-ins give you the opportunity to adjust savings goals or rebalance your portfolio if needed.

The gender investing gap is real, but there are steps women can take today to close it. With a plan, goals, and some follow-through, we can start to bridge the gap.


Let's Talk

Whether you’re looking to tweak your portfolio or want to start investing, we can help. 

1CFA Institute, The Equality Equation: Three Reasons Why the Gender Investing Gap Is Closing, May 19, 2019

2National Institute on Retirement Security, Still Shortchanged: An Update on Women’s Retirement Preparedness, May 2020 https://www.nirsonline.org/reports/stillshortchanged/

3Payscale, The State of the Gender Pay Gap 2020, March 31, 2020 https://www.payscale.com/data/gender-pay-gap

4Worldometers.info, Life Expectancy of the World Population, 15 January, 2021. https://www.worldometers.info/demographics/life-expectancy

5National Vital Statistics Reports, United States Life Tables 2017, June 24, 2019 https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_07-508.pdf

Diversification does not assure a profit nor does it protect against loss of principal.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

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