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How To Prepare for the Future: A Guide to Financial Planning for Women

Admin • March 22, 2024

You understand the importance of financial planning, and making decisions to manage and protect your wealth so that you (and potentially your partner!) can enjoy your retirement for years to come. But an often overlooked fact when financial planning — and one that has a significant impact on the planning process — is that women statistically live longer than men. 

On average, women in the U.S. live almost six years longer than men : This is six more years that women may have to consider their financial needs and protect their wealth and financial well-being. Women also face persistent gender disparities that impact their wealth accumulation. 

By addressing these issues with strategic financial planning, women can be more proactive in building a secure future for themselves and their families in the years ahead.

Challenge the Gender Income Gap

Women earn less than men: In 2022, women earned an average of 82% of what men earned , and this unfortunately hasn’t changed much in the last two decades.

Because of this, women may find it more challenging to save money and build an emergency fund. When you have less income coming in, it can be difficult to create a financial safety net, which leaves you less financially resilient to unexpected expenses.

The gender pay gap also affects women’s contributions to retirement accounts. A lower income often translates into smaller retirement savings, which can potentially lead to less financial security during retirement years.

To challenge the gender income gap, women can advocate for financial and income equality by negotiating salaries, seizing career opportunities, and advocating for fair compensation. By challenging the income gap, you can enhance your ability to save meaningfully and plan for the future.

Narrow the Investing Gender Gap

Women have also been less likely to invest their money compared to men: historically, around 60% of US men invest in stocks, compared to 40% of US women . While this gender gap in investing is decreasing rapidly, women can overcome it by actively engaging in investing. 

Women typically tend to be more risk averse, prioritizing wealth preservation and security and preferring less volatile investment options. There is also a confidence gap in investing: research suggests that women may possess lower confidence in their financial knowledge and investment decisions . This low risk tolerance and lack of confidence can make women more hesitant to pursue investment opportunities and explore more diverse financial instruments. 

Interestingly, despite being more risk-averse and less confident, women on average have better-performing investments than men, with up to 1% higher investment returns. Women are more likely to buy and hold their investments, and they are more likely to remain patient and calm during times of market volatility.

By further promoting financial literacy tailored to women, and breaking down stereotypes that lead women to believe they’re less capable than men of navigating financial markets, women can take control of their investment decisions and take charge of building and growing their wealth.

Set Goals as Part of Financial Planning

Setting goals to achieve throughout the different stages of their lives can help women foster financial stability and resilience throughout their years. Goals can act as a roadmap to guide you in your journey and help you take control of your financial future.

  • Short-term Goals : Establishing short-term financial goals is the first step in constructing a solid financial foundation. Build your savings, establish an emergency savings fund, and manage your debt to grow your wealth. Incorporate a budget as part of your financial plan, to help keep you on track to reaching your goals.
  • Mid-term Goals : Mid-term financial goals can include career advancement, homeownership, and investing. These all provide a strategic avenue for you to continue to build wealth and long-term financial security. Mid-term goals may also include paying for higher education costs for your children, or potential caretaking costs – investment strategies can help make these goals attainable while still building and protecting wealth.
  • Long-term Goals : Long-term goals involve retirement planning and estate planning to preserve and protect your wealth. ‘Early retirement’ planning helps ensure a comfortable life in your golden years. ‘Late retirement’ planning can help address the need for extended financial security if you live longer and survive your spouse.

Financial Planning for Women

A tailored, comprehensive financial plan can help women ensure they’ll have the continued financial stability and security to navigate the years ahead. Women should have a financial plan in place that not only plans for the years with a potential partner but also the years where they may be on their own.

Retirement Planning

With pay inequality, women start their working years lagging behind men in retirement savings. Because of this, women need to be proactive and begin retirement planning early on; this can help them build a strong foundation over time for a secure and comfortable retirement.

Explore all retirement savings options available to you: Choose retirement strategies that are aligned with your goals, and make sure to contribute the maximum whenever possible to 401(k)s, IRAs, Roths, or other retirement accounts. By starting this process early in your working years, you can ensure that your retirement contributions are well-positioned to maximize long-term growth.

Investment Planning

Investment planning is the cornerstone of financial growth and security. Tailoring investment strategies to the unique needs of women is key to maximizing wealth accumulation. 

Build a well-rounded portfolio that includes a mix of different asset classes and investment vehicles. Diversification can help you mitigate risk and weather any market fluctuations. Align your investments with your long-term financial goals, so that your investments can continue to grow and help you build wealth over time.

Estate Planning

As the longevity of women increases, so does the importance of estate planning and wealth preservation. With careful planning, women can proactively manage their estates and leave a lasting impact on the financial well-being of their loved ones.

Creating an estate plan will help ensure your wishes are honored and your wealth is distributed according to your intentions. It’s important to prepare a will, assign a power of attorney, and outline your healthcare wishes. Consider trusts and other estate planning strategies to minimize tax implications and create a more seamless transfer of wealth.  

Planning for wealth transfer and inheritance is a thoughtful process that involves careful consideration of family dynamics; communicate openly with your family so they understand your wishes.

Insurance Planning

Women should plan for potential healthcare needs in the later stages of their life, particularly with longer life expectancies. Women who live longer will likely face higher medical expenses in their lifetime, as well as be more likely to need long-term care. 

It’s essential to anticipate your healthcare costs in retirement and the care you may need so that you can be better prepared for future uncertainties without compromising your financial stability. Make sure you understand your life insurance and health insurance coverage, as well as the long-term care options available to you. Developing a comprehensive insurance strategy can provide peace of mind for yourself and your loved ones.

Empowering Women in Their Financial Planning

Navigating the intricacies of financial planning can be complex, and guidance from financial advisors can empower women to make informed decisions about their financial futures. At Five Pine Wealth Management , we take a holistic approach to financial planning to help you reach your investment and retirement goals. 

We make sure we understand your needs, objectives, risk tolerance, and time horizon so we can help you create a comprehensive plan that is custom-tailored to you and your unique circumstances. To see if we can help you, send us an email or give us a call at: 877.333.1015 today.

The Millennial Advantage: How to Use Your Generation’s Strengths to Build Wealth

March 28, 2025
Despite always hearing about the aging of America and the baby boomer generation, did you know the millennial generation is actually the largest age group in the country? Born between 1981 and 1996, millennials outnumber baby boomers post-WW2, with about 72.2 million millennials in the United States, as of 2023. The media often highlights millennials' financial challenges: mountainous student loan debt, a competitive job market, unaffordable housing, and credit card debt. There’s no doubt it’s been more challenging for millennials to save and gain a stable financial foothold compared to previous generations. Yet despite these hurdles, millennials have financial opportunities available to them that previous generations did not. Millennials came of age with the rise of the internet and advances in technology; they’re digital natives, incredibly tech-savvy, and well-positioned to master the digital era they live in. Millennials’ unique position in history gives them advantages when it comes to investing, starting a business, and increasing their financial literacy. Millennials and Investing Millennials are changing the game when it comes to investing—innovative financial platforms and investment products have helped to evolve the investment landscape, and have made investing more accessible than ever before. As a millennial, embracing this innovation can help move you closer to achieving your goals and building a financially secure future. Impact Investing Millennials are known for being socially conscious with their spending and supporting brands and companies that align with their values. This desire to make a difference often extends into their investments—intentionally choosing to invest in companies that reflect their values and promote the causes they support. Through impact investing, you can support positive global change while also working toward your financial goals. Impact investing can be done through investing in Environmental, Social, and Governance (ESG) investment funds, or through pursuing a strategy of Socially Responsible Investing (SRI). ESG funds focus on businesses that have strong environmental policies, social impact initiatives, and good governance. These funds have become increasingly popular with investors, like millennials, who want to support companies that prioritize sustainability and ethical practices. SRI focuses on investing in companies that promote environmental sustainability, social justice, and corporate ethics. SRI can also exclude investing in companies that engage in activities that are considered negative or harmful—tobacco, alcohol, fossil fuels, firearms, or the defense industry. Cryptocurrencies and Decentralized Finance Cryptocurrencies are newer investment frontiers that techie millennials can be more comfortable exploring than older generations. Crypto such as Bitcoin and Ethereum are digital currencies that operate on blockchain technology , which provides increased transparency and security. Crypto investments can be risky, but can also offer high rewards. Decentralized Finance (DeFi) platforms also leverage the security and transparency of blockchain technology to offer decentralized financial services and transactions. DeFi platforms provide opportunities for lending and investing without traditional intermediaries like banks and other centralized institutions. For millennials, DeFi represents a cutting-edge way to engage with financial services and they can offer more control and potentially higher returns than traditional methods. The Power of Time One of the biggest advantages millennials have when it comes to investing is time. If you start investing early, you can benefit from compound interest and long-term investments, which can significantly boost your returns and help increase your wealth. Compound interest is the process where the interest you earn on an investment is reinvested, which generates more interest. The longer your money is invested, the more it can grow. Even small, consistent contributions to your investment portfolio can accumulate substantial wealth over time. Having a long-term investment horizon allows you to ride out market volatility, and capitalize on growth over time. By not reacting to short-term market fluctuations, you can achieve more stable returns. Long-term investing is a powerful tool that can help you build a secure financial future. Millennial Entrepreneurship This generation’s core characteristics set them apart as innovators and business creators. As digital natives, millennials have a strong grasp of technology which allows them to leverage digital tools such as social media marketing, e-commerce tools, and data analytic platforms to grow their businesses exponentially. You’ve likely seen peers thrive in their ventures through their use of social media, which has become a critical tool for marketing, brand building, and customer engagement. Community-building is also highly valued among this generation—the use of LinkedIn alone helps entrepreneurs connect with fellow collaborators, business owners, and mentors. Similar to aligning your investments with your values, you can easily integrate your ethical beliefs into your business ventures. Ethical business practices such as developing eco-friendly products, creating an inclusive workplace culture, and advocating for fair trade processes can make a positive impact and build loyal customer bases. Millennials and Financial Literacy The millennial generation has more resources than ever to increase their financial literacy. Free online finance courses are easy to access, readily available, and enable you to educate yourself so that you can make smart financial decisions to help you achieve your goals. Personal finance apps like Mint and YNAB (You Need a Budget) can also increase your financial literacy by helping you understand and manage your finances more effectively. They offer features like budget tracking, expense management, and financial goal setting to help you be in full control of your finances. Finance apps make it easier for you to stay on top of your financial health and make informed decisions in managing your money. Work with Us to Reach Your Goals  Ever-evolving technology has transformed the financial landscape significantly over the last few decades and millennials are more prepared to take advantage of that transformation than any generation before them. While you can take charge of your finances on your own, working with a financial advisor can help you find your path and stay the course of your journey toward financial security. Financial advisors can provide advice that is tailored to your individual circumstances, to better meet your unique needs and objectives. At Five Pine Wealth Management , we’re committed to helping you create a customized financial plan and investment strategy to help you reach your current and future goals. As fiduciary financial advisors, we always act in your best interest in every step we take with you on your financial journey. We also offer virtual financial planning for millennials looking to fit financial planning into their own schedules. To see if we can help you, email us or give us a call at 877.333.1015 today to schedule a meeting.

Just Got a Raise? Implement These 5 New Strategic Wealth Opportunities

March 21, 2025
Getting a raise is an exciting moment in your career and financial journey. Maybe you’ve gone through an executive-level position change and received a 10% pay bump or an internal promotion yielded you an additional 15%. Regardless of how you got your raise, you’re now in a unique position to move the needle on your long-term financial goals (and maybe splurge a little, too). But before you pull the trigger on that major purchase you’ve been eyeing, it’s important to have a long-term plan for the extra money in your paychecks. Even a significant raise can erode quickly if you suddenly upgrade your home, start vacationing like a celebrity, or snap up that Mercedes you’ve been eyeing. Below are our top five strategic wealth opportunities for you to consider the next time you receive a raise. First Things First: Understand Your New Numbers A 10% or 20% raise may sound like a huge boost, but not all that money will land in your bank account. Before making any financial moves, it’s important to calculate your new take-home increase after taxes and contributions. For example, if you receive a $25,000 raise on a $175,000 salary, you might expect $2,083 more per month. However, after accounting for federal taxes, state taxes, and other deductions, your actual monthly increase might be closer to $1,500. Knowing your actual take-home pay helps you set realistic expectations and make informed financial decisions. Getting a Raise: 5 New Strategic Wealth Opportunities For high-income earners, getting a raise isn’t just more spending power—it’s an opportunity to build lasting wealth while minimizing taxes. Instead of falling into lifestyle creep, consider these five wealth-building strategies to maximize your higher income. 1. Grow: Maximize Tax-Efficient Investment Opportunities With your increased income, you now have more opportunities to maximize tax-advantaged accounts and investment vehicles. For 2025, you can contribute up to $23,500 to your 401(k), plus an additional $7,500 if you're 50 or older. If you weren't maxing out your contributions before, your raise provides an excellent opportunity to reach these limits. Let's say you direct $750 of your new monthly take-home pay to your 401(k). You not only build retirement savings but could save approximately $2,160 in federal taxes annually if you're in the 24% tax bracket. Consider increasing your retirement and investment contributions by the same percentage as your raise. For example, if you receive a 10% raise, aim to increase your contributions by 10% of that raise. This incremental adjustment will help ensure you can maintain the lifestyle you're accustomed to when you retire. 2. Save: Optimize Tax Strategies to Reduce Liabilities A higher income often means entering new tax brackets, making tax efficiency more crucial than ever. Without proper planning, you might find a significant portion of your raise going to Uncle Sam instead of building wealth. Consider switching to a high-deductible health plan (HDHP) for your family, which can lower your premiums while giving you access to a Health Savings Account (HSA). In 2025, you can contribute up to $8,550 for family coverage , potentially saving around $2,000 annually in taxes. Additionally, the money in your HSA grows tax-free and can be withdrawn for qualified medical expenses without tax liability. 3. Diversify: Explore Alternative Investments A higher income can open the door to new investment opportunities, allowing you to diversify beyond traditional stocks and bonds. Alternative investments like real estate investment trusts (REITs) can provide exposure to different asset classes, potentially offering both passive income and long-term appreciation. These types of investments often move independently of the stock market, helping to balance overall portfolio risk. They can also offer lower barriers to entry compared to direct property ownership or other traditional alternatives. The key is to align your investments with your risk tolerance and liquidity needs while taking advantage of opportunities that complement your existing strategy. 4. Strengthen: Build Your Estate With more income comes greater potential for building generational wealth. Investing half of your $25,000 raise annually for 20 years with a 7% return could add over $500,000 to your estate. This makes it essential to have proper structures in place for efficient wealth transfer. To ensure your wealth transfers efficiently, consider: Trusts to protect assets and minimize estate taxes Life insurance strategies for wealth preservation Family-limited partnerships for multi-generational wealth planning These structures become increasingly valuable as your wealth grows. 5. Impact: Upgrade Your Philanthropy & Social Impact There's something powerful about reaching a place in life where you can give back meaningfully. Beyond the personal satisfaction of a higher income, this new chapter brings an opportunity to create lasting positive change in your community and the causes closest to your heart. Maybe you still remember the community college professor who believed in you when you weren't sure about your path. Now, twenty years later, by creating a donor-advised fund (DAF) to support student scholarships, you're not just making education more accessible—you're giving another student their own life-changing mentor. By thoughtfully structuring your charitable giving through vehicles like DAFs or qualified charitable distributions from retirement accounts, you can maximize both the impact of your generosity and the tax benefits that come with it. After all, effective philanthropy isn't just about giving money away—it's about creating meaningful change in the ways that matter most to you. Red Flags: Top Signs of Lifestyle Creep While getting a $25,000 raise provides excellent opportunities for wealth building, it's important to avoid (too much) lifestyle creep. That upgraded car lease might cost an extra $200 monthly, the bigger house another $800 in mortgage payments, and the premium credit card's annual vacation package another $400 monthly in travel costs. Before you know it, your entire raise can get absorbed by new expenses. While there's nothing wrong with enjoying the fruits of your hard work, the key is being intentional about which lifestyle upgrades truly matter to you. Here are some common warning signs that lifestyle creep might be eroding your raise: Your monthly expenses rise automatically with your income You upgrade multiple lifestyle aspects at once (housing, car, travel, dining) Your savings rate remains unchanged despite higher earnings Luxury spending becomes your new normal Your cash reserves aren’t growing despite a higher paycheck Instead of automatically increasing spending across the board, take time to identify the one or two changes that would bring the most joy and fulfillment to your life. Then, invest the rest. Put Your New Money to Work with Five Pine Wealth While these strategies focus on wealth building, don't forget to invest in yourself through continued education, health, and meaningful experiences. The key is finding the right balance between growing your wealth and enjoying the fruits of your success. Whether you've recently received a raise or are anticipating one soon, having a plan in place can help you maximize this opportunity. Our team can help you evaluate which of these strategies would work best for your unique situation and create a customized plan to help you reach your financial goals. At Five Pine Wealth Management , we can help you implement these strategies in a way that aligns with your personal goals and values. To learn more about making the most of your increased income, schedule a meeting with us. Email us at info@fivepinewealth.com or call us at 877.333.1015.  Let's work together to transform your raise into lasting wealth.
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