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Women face no shortage of challenges as they seek to secure their financial future, and most are well-documented.
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They still earn less than men for the same work, which leads to smaller retirement account balances.1
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They are more likely to be primary caregivers for children and aging parents, which may result in career interruptions.2
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They more often work in part-time jobs so that they can balance household responsibilities, which reduces access to retirement benefits.3
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They live roughly five years longer than men, incurring higher health care costs as they age.4
But the financial risks that women face aren’t always inflicted by external sources. In some cases, their ability to build wealth for themselves and their families is equally hampered by … fear.
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How much fear?
According to MassMutual research, women (45 percent) are more likely than men (35 percent) to cite “fear of making a mistake” as their primary reason for financial inaction — echoing the results of prior data that point to a pattern of low confidence among female investors.5
While most women (73 percent) feel comfortable with day-to-day money management tasks, including bill paying and budgeting, fewer said they feel comfortable with more complex, longer-term financial decisions, such as:
- Retirement planning (60 percent)
- Managing investments (58 percent)
- Financial planning through different life stages (57 percent)
- Building wealth (57 percent)
- Purchasing financial protection products, such as life insurance and disability income insurance (56 percent)
Other financial challenges that disproportionately create anxiety and stress for women, MassMutual found, include helping aging family members with their finances and managing a financial windfall or inheritance. That’s alarming, given that women in the U.S. are poised to control the majority (two-thirds) of investable assets by 2030 as part of the largest wealth transfer by gender in history.6 (Related: The horizontal wealth transfer: Redefining women’s wealth)
The good news? Financial fear can be easily overcome.
How? By creating a financial plan that puts you in the driver’s seat.
Of course, you need not go it alone. A trusted financial professional can help you:
- Define your vision for retirement.
- Create an investment strategy that aligns with your goals.
- Develop a safety net with protection products that may help reduce your risk of outliving your assets.
More on these steps and how to find a financial professional below.
Caution is different from fear
In any discussion of behavioral finance however, it is important to distinguish between caution and fear. Indeed, there is value in due diligence.
At this, women excel.
Research reveals that women are more deliberate when it comes to building wealth. And they spend more time researching their options, contribute a higher percentage of their income to workplace retirement accounts, and are more likely to prioritize long-term financial stability over short-term market wins.7
Indeed, Fidelity Investments found that female investors outperformed male investors by an average of 40 basis points, or 0.4 percent — a seemingly negligible difference that packs a punch over time.8
“Women are thoughtful investors,” said Victoria Thomas, a financial professional with GoldBook Financial in Scottsdale, Arizona. “Part of that is because the risk is real for women. The earnings gap put them at a disadvantage, so it was harder for them to save. And because of their lower lifetime earnings, they tend to have smaller Social Security benefits when they retire. They can’t afford to be careless.”
Financial fear can be costly
Women clearly have the resolve to plan and invest successfully, but many let fear hold them back.
Some lack the knowledge or confidence to invest for growth, believing the financial markets to be too complex. Others are risk averse and may feel that the upside opportunity of owning stocks isn’t worth the potential for loss.
Financial planning that is dictated by fear can be costly.
For starters, it delays decision-making. Investors who wait even a few extra years to begin funding their retirement miss out on the potential for compounded growth during those years. That makes it harder to build wealth.
For example, a 22-year-old who starts saving $475 per month in her 401(k) would amass a nest egg of roughly $2.4 million by age 67 — assuming an 8 percent annual return. By waiting until age 32 to begin putting money away, instead, her retirement savings would be worth roughly $1.1 million at age 67, assuming the same monthly savings and rate of return.9 (Learn more: Why it is important to start saving for retirement early)
Loss aversion can also lead to lower returns when it prompts investors to panic sell during market downturns and jump back in when it starts to recover — which perpetuates a cycle of buying high and selling low. For average retail investors, market timing is widely dismissed as a fool’s game that causes higher transaction fees and lower returns.
Lastly, financial fear can increase longevity risk, or the risk of outliving one’s savings, when it causes investors to curate a portfolio that is too conservative. (Learn more: Are you a conservative investor?)
An asset allocation that is weighted too heavily toward fixed-income securities (that traditionally offer lower risk and lower returns than stocks), cash or cash equivalents, and dividend-paying stocks that have historically provided predictable cash flow may not provide the returns they need to achieve financial wellness.10
Depending on how heavily investors allocate toward cash and fixed income, in fact, they may not even keep pace with inflation, which guarantees a loss of purchasing power over time.
The action plan
It’s easier than you might think to kick financial fear to the curb.
Start by getting your financial house in order and setting small, achievable goals to help you build confidence.
- Create a budget and stick with it.
- Pare down debt starting with the highest interest loans first.
- Build an emergency fund so minor setbacks don’t derail your long-term plan.
Next, begin educating yourself about basic investing concepts, such as diversification, dollar-cost averaging, compound interest, the impact of fees on your return, and the tax treatment of different types of investment accounts.
Online tools and resources can help demystify financial jargon and empower newcomers to begin building an investment portfolio. Many employers and retirement plan administrators also offer educational resources and learning platforms.
You don’t need an MBA to be a successful investor. You just need to begin saving. Today.
Tips for getting started as an investor
The easiest point of entry is your retirement plan.
Consider putting your savings on autopilot by contributing monthly to your workplace 401(k) or a traditional IRA, which allows any growth to accumulate tax deferred and can potentially help you reach your financial goals faster. (Related: Understanding qualified retirement plans)
If you can’t contribute 10 percent to 15 percent of your salary right away, start with whatever you can and make a commitment to increase your contribution by 1 percent per year, or by larger amounts as bonuses and pay raises allow. The important thing initially is to establish a discipline of saving. Once you’ve maximized contributions to your pre-tax retirement account, consider putting more of your money to work in a taxable brokerage account, which offers more flexibility.
Earnings in a brokerage account are subject to capital gains tax, but they are also accessible, meaning you can sell your stocks at any time to generate cash for short-term goals, such as the purchase of a new car, or long-term goals, such as a down payment on a house. There are no restrictions on how much you can invest in a brokerage account, unlike a pretax retirement account, which has annual contribution limits ($23,500 for 401(k)s and $7,000 for IRAs in 2025).
Some new investors prefer mutual funds or low-cost exchange-traded funds, which invest in a variety of stocks and bonds that are selected by a professional fund manager. Such funds may enhance diversification and enable everyday investors to participate in the market without having to research individual securities on their own. (Learn more: Mutual fund and ETF basics)
Building your safety net
Your next order of business is to build your financial safety net with protection products that can potentially help secure your financial future and reduce longevity risk.
Those include:
- Life insurance. Term life insurance offers a death benefit to your beneficiaries for a fixed period of time, paying out in the event that you should pass away when the policy is still in effect. A whole life insurance policy, by contrast, offers a guaranteed death benefit to your beneficiaries regardless of how long you live, as long as you remain current on payments. It also accumulates cash value that can be used during your lifetime to pay for whatever you need — to supplement your retirement income, help cover college tuition, or fix a leaky roof.11 (Learn more: Permanent life insurance vs. term: A comparison)
- Disability income insurance. Your earnings potential is likely your most valuable asset. Disability income insurance can help protect it by replacing a portion of your income if you are unable to work due to an illness or a qualifying disability, which is statistically far more likely than dying prematurely. In many cases, the group coverage you receive through your employer would not be enough to maintain your lifestyle. (Learn more: 6 ways group disability income insurance may fall short)
- Long-term care coverage (LTC). LTC insurance can help pay for assisted living services or nursing home care, costs that women are more likely to incur with their longer life expectancy. Medicare typically does not cover such services. Some hybrid whole life insurance policies include a long-term care rider, which can provide long-term care coverage during the policyowner’s lifetime but can also provide a death benefit to the policyowner’s beneficiaries.
Lisa Frankovich, a financial professional with GoldBook Financial in San Diego, California, said annuities may also help investors rest easier at night, particularly women who run a higher risk of outliving their assets as they age.
“Many of my female clients have more fear about being in the market than my male clients,” she said. “Annuities are one way to alleviate financial stress because they can provide guaranteed income for life to help cover their fixed expenses in retirement.”
Annuities are contracts with a life insurance company that provide guaranteed income either immediately or at some point in the future in exchange for an up-front payment or series of payments.
By using annuities to help cover the gap between their fixed expenses and their other sources of guaranteed income, including Social Security and pensions, retirees may not have to worry about running out of money. That, in turn, may enable them to invest more aggressively and reach for growth, knowing that their living expenses are covered. (Learn more: Different types of annuities explained)
How to find a financial professional you can trust
A trusted financial professional can offer valuable guidance at every step of your financial journey. They can help you tailor a financial strategy to your objectives, outline the pros and cons of your investment options, and answer questions about financial products that can help you build confidence over time.
But many female investors report that they don’t know where to turn for advice.12 (Learn more: Finding and choosing a financial professional)
You can find a financial professional by asking your network of family, friends, and professional peers for recommendations. You can also use online search tools from MassMutual, the Financial Planning Association, and The National Association of Personal Financial Advisors.
Then, schedule interviews with two or three. The relationship between a client and a financial professional is highly personal, so it’s best to do this in person. Ask about their investment strategy, their compensation structure, how frequently they communicate with clients, and what their credentials are. You ultimately want to be sure that you select a financial professional who puts you at ease and understands the unique financial challenges that women face.
Conclusion
Investing involves complex financial products, economic unknowns, and the potential for loss. It’s no wonder that women, who face added challenges in securing their financial future, are more likely to be cautious.
But letting fear dictate their financial decisions is also a risk.
By developing a financial plan, investing to pursue growth, and using protection products to create a safety net, female investors can potentially better position themselves to meet their short- and long-term financial goals.
Discover more from MassMutual…
Why annuities may be more valuable for women
The horizontal wealth transfer: Redefining women’s wealth
Need a financial professional? Find one here
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1 U.S. Bureau of Labor Statistics, “Women’s earnings were 83.6 percent of men’s in 2023,” March 12, 2024.
2 Morgan Stanley at Work, “Retirement Planning for Women: Why the Stakes Are Higher,” 2025.
3 U.S. Department of the Treasury, “Spotlighting Women’s Retirement Security,” Sept. 20, 2024.
4 National Center for Health Statistics, “Life Expectancy,” June 5, 2025.
5 MassMutual, “2025 MassMutual Women’s Financial Confidence Study.”
6 McKinsey & Company, “Women as the next wave of growth in US wealth management,” July 29, 2020.
7 Vanguard, “How America Saves 2024.”
8 Fidelity Investments, “2021 Women and Investing Study.” Who’s the Better Investor: Men or Women?”
9 This is an example of a mathematical concept. The assumed 8 percent return is hypothetical, and there can be no assurance that any rate of return — or nest egg amount — can be achieved.
10 Past performance is not indicative of future returns.
11 Be aware that borrowing against life insurance cash value increases the chances that the policy will lapse, reduces the cash value and death benefit, and may result in a tax bill if the policy terminates before the death of the insured.
12 MassMutual, “2025 MassMutual Women’s Financial Confidence Study.”
