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No matter what industry you work in, being a woman brings unique challenges that men don’t have to deal with. The response isn’t to resign ourselves or get overly caught up in fighting for systemic change. Instead, identify what those challenges are and get the resources you need to overcome them.
Competing goals
Women executives tend to take on responsibilities without considering their long-term costs. For most of us, this is just second nature – women are incredibly giving, even to their own detriment. As a result, they end up with a whole host of competing financial goals. At the same time that they are working toward retiring at a reasonable age, they also want to take care of their aging parents, while helping to support their grown children and grandchildren.
One couple I know had chosen to downsize their lifestyle shortly after their kids left for college. But only a few years after selling their home and buying a smaller one, I learned that they were once again in the market, this time for a bigger house. The reason? Their two children, now adults, were moving back in with them. Both these children work and make good money; nevertheless, this couple is not only housing them rent-free, but they cover a great deal of their expenses. They feel obligated to continue helping their children, but they’re doing it at the cost of their own financial security.
Women executives seldom realize how this pattern of saying “yes” contributes to their stress, anxiety and feeling trapped. They put their personal goals on the back burner, funding everything except the things that contribute to their own happiness. I see time and time again that women choose to put others before themselves – to their financial detriment.
My job is to help these women executives understand that their current way of life is a choice and to help them see what other choices are available to them. What do they need for their own life? What does quality of life mean to them, and what’s involved in creating it? It’s important for women executives to recognize that no matter where they start, there’s only so much time they have left, and only so much money they can make within that time frame. It’s vital to understand the long-term implications of how they choose to use their resources.
Less money to fund their goals
We’re all familiar with the fact that women executives are paid less than men for doing the same jobs. A lesser known fact is that the average woman executive leaves a million dollars on the table over the course of her working life, simply by not knowing how much she is worth or asking for what she deserves.1 How is this possible?
By getting paid less
By not getting paid what you’re worth, you don’t get the opportunity to save as much as you should. That translates to lost income, lost Social Security benefits (which are scaled on your pay), and lost portfolio growth over time.
By not negotiating
While men generally have no problem asking (or over-asking) for what they are worth, women seem instinctively averse to it. Moreover, women executives often don't know the market value of their work – women report salary expectations 3% to 32% lower than those of men for the same jobs.
Failing to negotiate plays a significant role in wage disparity. A study from Carnegie Mellon University revealed that eight times as many men as women graduating with a master’s degree negotiated the starting salary of their first job. That first job sets the tone for your earning potential over your entire career – by not negotiating, a woman stands to lose over $500,000 by age sixty.
By not obtaining sponsors
In addition, women executives are less likely to get the benefit of powerful sponsors that can help them climb to higher-paid positions in their field. All this means less money to fund their goals.
By working less
Not only do women executives make less money than men in the same position, but they work fewer hours over the course of their career. On average, a woman executive’s working life is 12 years shorter than a man’s, mainly because they take time off where men typically don’t – for pregnancy and recovery, for raising children, for tending to older parents. Women executives also tend to retire sooner, either because they’re exhausted or because their health won’t allow them to continue at the same pace. Again, this 12-year gap translates into a tremendous loss of income.
By taking time off
Some of my clients, after taking time off for pregnancy, will go back to work at a reduced schedule or workload in order to have time for raising their children. However, they soon find that because they’ve cut down their schedule by 10% to 20%, the company is sticking them with the projects that nobody else wants. This downgrade doesn’t just affect their income; it also affects their career trajectory. Having low-profile projects means less ability to position yourself for promotions and raises.
By putting themselves last
Women executives make sacrifices that prioritize their personal life over the professional. Regardless, we make these choices without thinking twice, and we take the consequences in relative silence.
As for fighting the system to get the financial rewards we deserve, it feels like just one more thing to do.
More professional challenges
The nature of women’s professional challenges varies, depending on the industry. But those challenges all come down to the rewards and motivations that brought them into those careers.
From focus groups I have conducted, I’ve learned that many women attorneys tend to pursue law because they expect it will offer them a high standard of living, while women executives in science, technology, engineering, and mathematics (STEM) are drawn to these fields out of passion for those particular studies. Women attorneys are beset by the challenge of earning the same pay as their male counterparts. Women in STEM have to work extra hard to attain positions that routinely go to men. Statistically, women in STEM get passed over for leadership roles and are funneled into administrative positions instead. Even there, women come up against a glass ceiling. Women make up only 15% of the chief officer titles in the technology industry, and more than 30% of public companies and 68% of unicorn tech companies have no women on their boards.2
Women executives are not making it to senior positions because they lack the sponsors to help them get there. In their report, Sponsoring Women to Success, Catalyst found that sponsorships are key to advancing high performers and gives them greater opportunities to excel through skill development and increased visibility. Having a sponsor rather than a mentor explains the gaps in career advancement and compensation that women face right out of the gate, as well as over time, in comparison to their male peers.
Another example of the unique challenges professional women face can be found in medicine. Although women outnumber men among degree earners in the life sciences, and women comprise 37% of all physicians and surgeons, only 16% are permanent medical school deans.3 Even in the more traditional female role of nursing, while women continue to make up the majority of registered nurses (89.4%) and nurse practitioners (90%), a recent study showed that male nurses were earning more than women!4 There exists a clear gender-pay gap, even in traditionally female roles.5
This didn’t happen just because the medical industry favors men. According to a recent study, male nurses were awarded higher salaries because they asked for them. For whatever reason, one of the greatest professional challenges women face is their own tendency to tell themselves they aren’t ready for the next move, that they haven’t proven themselves sufficiently, or that they haven’t earned the right to ask for more.
Post-career expenses
In addition to the fact that women take time off work for caregiving, spend fewer years working, wind up with less Social Security, and earn less relative to men, key life expenses like retirement and healthcare are more expensive for them.
We have longevity to partially thank for that. The average woman lives two years longer than a man does, which means she has more years of life to fund. Women also tend to serve as the caregivers to their spouses in old age, a role that has considerable financial and emotional costs. From reduced working hours for caregiving, which translates into lost wages and social security benefits (to the tune of $324,044), to the physical and emotional tolls it creates, caregiving can have a tremendous cost for women.6
Outliving your spouse has additional financial challenges for women. Social Security benefits may be reduced, and pensions and annuity income may be affected, depending on the chosen income distribution. Unfortunately, many life costs do not decrease enough to offset the decrease in income. Add to this the change in tax filing status to “single,” and you are looking at some significant income challenges.
That’s not all. Women’s healthcare costs are statistically more expensive than men’s. In fact, due to longevity, a healthy 55-year-old woman on average will pay $79,000 more for healthcare over her retirement than a 55-year-old man.7 Once they are alone in old age, they must figure out how to pay these costs with limited funds, as well as create a plan for getting the long-term care they need, since they don’t have the benefit of a spouse to serve as their caregiver. There is a host of financial issues around getting older as a single woman, and many women don’t take the time to plan or save for these issues.
It’s no wonder that only 10% of women are "very confident" in their ability to fully retire with a comfortable lifestyle.8 Many women executives keep putting off their last day on the job because they don’t know how much they’re going to need when that day comes. For many of them, there’s good reason for that fear: Women executives are shown to save less money over their lifetime. This inability to save is rooted in a lack of financial literacy – women in general just don’t know enough about money. Often, it is because they weren’t raised to understand money very well. Everything they do know is self-taught. Factor in that confidence gap that makes women executives constantly doubt their own qualifications, and you end up with a personal finance situation that is ripe for being derailed.
Bridget Venus Grimes, CFP®, is founder and president of San Diego, CA-based, WealthChoice, a firm specifically focused on helping women turn their professional success into financial success so they and their families can live their ideal life.
1 Linda Babcock and Sara Laschever, Women Don’t Ask: Negotiation and the Gender Divide. (Princeton University Press, 2003.)
2 “Breaking down the gender challenge," McKinsey Quarterly, (March 2016)
3 “The Women’s Leadership Gap,” Center for American Progress (May 21, 2017).
4 US Bureau of Labor Statistics Table 11 Current Population Survey: Household data annual average 2015.
5 “Even in Nursing Women are Paid Less than Men,” Huffington Post, accessed May 24, 2015.
6 “Women and Caregiving: Facts and Figures,” Family Caregiver Alliance.
7 “Women’s HealthCare Table in Retirement: $79,000 more than Men’s,” Money, December 7, 2016.
8 “Seventeen Facts About Women’s Retirement Outlook,” Catherine Collinson (March 2017).
Read more articles by Bridget Venus Grimes
