Women in the U.S. are about to gain significant wealth. Here’s what that means

Researchers believe that the greatest wealth transfer in U.S. history is here. Recent estimates suggest that some $84 trillion will be passed down from older Americans to millennial and Gen X heirs through 2045—and that $16 trillion will be transferred within the next decade. A recent New York Times story suggests that wealthy white families will transfer the largest share of this money, and women are expected to benefit significantly.

Over all, women are set to be the largest beneficiaries of the current wealth transfer, and that share is likely to grow in the future, according to a 2020 McKinsey report which points to women as “the next wave of growth in U.S. wealth management.” Women currently control about $11 trillion in assets. By 2030, they are expected to control much of the $30 trillion in wealth that baby boomers possess.

I have worked in the financial services industry for over a decade, and I believe many are under prepared for the ramifications of this significant wealth transfer, and are unaware of the nuances of how women manage their money.

For instance, women report increased feelings of anxiety toward their finances compared to a year ago, and continue to face both historical challenges and impacts of the current macroeconomic environment that could impede their financial stability and confidence.

Against this backdrop, many women are working to make progress against goals like shoring up savings and developing investment strategies. According to data from New York Life’s Wealth Watch survey, more women reported having retirement savings compared to a year ago (32% in December 2021 vs. 36% in December 2022) and 52% of women reported having a financial strategy in place, with an additional 12% interested in developing one.

Employers and financial professionals can play a critical role in helping women prepare today, so that they are in a stronger position to capitalize on this upcoming wealth transfer—while remaining cognizant of how historical disparities and longer time horizons interact with the current economic landscape to create unique financial challenges, and opportunities, for women.

Women invest differently

Women are more likely than men to control household spending, giving them a better understanding of expenses and available assets. Women are also skilled long-term investors who are more likely to stay the course with their investments when markets are volatile, but they also tend to be more risk-averse than men. A survey from GOBankingRates showed that women’s risk-averse attitudes can sometimes prevent them from becoming investors in the first place. Women who find themselves suddenly single following a separation, divorce, or the death of a spouse within the last five years report risk-averse investing behaviors at higher rates than other cohorts of women. In fact, 74% of women who find themselves suddenly single report trying to minimize risks when it comes to investing.

While women’s investment confidence levels vary, there’s a distinct difference in financial priorities between women and men. According to a 2022 study from Ellevest, women are more likely to say their top priority is supporting their family, while men are more likely to say their top financial priority is to grow their retirement savings.

And of course, women are not a monolith. Depending on their circumstances, career status, and relationship status, women’s financial priorities differ. For instance, women who are suddenly single are more likely to tailor their financial strategy towards ensuring independence. These preferences are often tied to the persistent financial disparities that women face, as well as the impact of current market conditions and ongoing inflation.

Historical challenges

Compared with men, women earn less, live longer, have higher educational attainment, and are more likely to have their financial lives disrupted by caregiving responsibilities. The money women earn must be stretched further for longer. Additionally, fewer women are getting married, and those who are marrying are doing so later, meaning many women are facing these challenges with a single income.

While women are making advancements in bolstering their total wealth, Pew Research Center reports that the wage disparity between men and women has remained essentially stagnant for the past two decades. Women earned 82% of men’s earnings in 2022, a mere 2% increase from 2002, when women earned 80% of men’s earnings. In addition, inflation historically most harms those who are on fixed incomes and those who are in debt – meaning, women are most negatively impacted by a high-inflation environment.

Finally, changes brought about by COVID-19 have also disproportionately impacted women—forcing many women to leave the workforce due to caregiving responsibilities, experiencing burnout, and down-shifting their careers, citing factors like lack of opportunity for advancement or conflicting demands. Along with childcare, women are more likely to find themselves “sandwiched”—providing care both to children and older loved ones.

The impact of caregiving isn’t just financial—it’s essentially a wellbeing tax on women, impacting their mental, physical, and social health as well. Our team found that 45% of women reported parenting was emotionally much harder than they expected, compared to 35% of men, while 34% of women agreed parenting was socially harder than they had expected, compared to 29% of men.

The opportunity ahead

Factors impacting women’s finances, such as the wage gap, higher rates of educational attainment and thus potentially higher instances of outstanding student loan debt, and women’s disproportionate caregiving responsibilities, intersect with macroeconomic factors like inflation and market instability to create unique economic binds for women. As women continue to take ownership of their financial futures, they will likely look for support from employers and financial professionals.

Employers can focus on understanding the specific barriers to financial wellbeing that women face when developing resources and financial wellness education initiatives in order to design inclusive solutions. Engagement, programming, and access to professional guidance to address debt management, family formation and caregiving needs, investment strategies, income protection, and retirement savings can position women to make the most of the upcoming wealth transfer and position employers to attract and retain this critical segment of the workforce.

I strongly believe that financial professionals who deeply connect with female customers and who understand their preferences, priorities, and behaviors, can best help women through the massive wealth transfer that we are now experiencing.

Suzanne Schmitt is the head of financial wellness for New York Life.