Ask an Advisor

Investing is 'a must' for women to achieve a secure retirement, advisor says. These 3 steps can help

Key Points
  • As more women expand their investments beyond retirement accounts, some still feel behind, research found.
  • Taking certain steps with your finances now can make a big difference in how you live in 40 years, one advisor said. Here's how to get started.
Financial advisor shares her advice for women to start investing now
Financial advisor shares her advice for women to start investing now

Women tend to outperform men when it comes to investing, yet some may still be at risk of falling behind.

Over a 10-year span, women's returns were, on average, 40 basis points, or .4%, higher than their male counterparts, according to a 2021 report from Fidelity Investments that was based on more than 5 million account holders.

While 67% of women are gaining the confidence to invest outside of retirement accounts, that still leaves 33% who are missing that opportunity, according to Fidelity.

What's more, women are more likely, at 50%, to say they're behind on retirement savings, versus 35% of men, a recent report from Goldman Sachs found.

More from Personal Finance:
White House makes big change to student loan repayment
Retiree Medicare expenses could top $383,000 for a couple
Entrepreneur built $3 million business buying cars at auctions

For women who haven't made investing a priority, getting started should be at the top of their to-do list, said Stacy Francis, a certified financial planner and president and CEO of Francis Financial in New York. She is also a member of the CNBC Financial Advisor Council.

"Investing is not a 'nice to' for women; investing is a 'must,'" Francis said.

Maxing out 401(k) and IRA investments should be a priority, Francis said — and beyond that, the more an investor can do, the better.

1. Take stock of where you are now

Big life challenges — having children, divorce — may force women to take control of their finances in a different way. Even if one of those life events has not been thrust upon you, it's a good idea to brush up on your cash flow, including your total income and expenses.

"You can't make good decisions unless you know what you have and you don't have and then build a plan for how to grow those assets over time," Francis said.

Also assess what progress you have made toward your retirement thus far, and what you would like to achieve going forward.

"Understand that every dollar you can put away is going to double, triple and quadruple, potentially, before you need it in retirement," Francis said.

Halfpoint Images | Moment | Getty Images

2. Start with 'a tiny step forward'

The biggest factor that holds women back from investing more is lack of education, according to Francis. Understandably, it can feel scary if you're not sure what you're doing, she said.

"Wherever you are, take a tiny step forward," Francis said.

That may mean starting by investing $50 or less per month. Getting started, even with a small amount, helps you establish an investing habit and benefit from an investor's greatest asset: time in the market.

3. Choose to educate yourself every day

To improve your financial literacy — and become a better investor — make a commitment to educate yourself every day, Francis recommended.

It does not have to take a lot of time — even just a two- or three-minute read. There are plenty of resources available, from, a nonprofit organization founded by Francis that offers free financial literacy resources, to websites and books.

Over time, building that habit will help fill your knowledge gaps and improve your bottom line as you make wiser financial moves.

"It's essentially writing a love letter, not only to yourself today, but to who you are going to be 10, 20, 30, 40 years from now," Francis said. "And we need to make sure that we're taking care of her, too."

Join us virtually for Women and Wealth, a CNBC Your Money event, on April 11, where financial experts will share how women can increase their income, save for the future and make the most out of current opportunities. Register for free today.