Mastering long-term wealth for women

WHILE financial planning is gender-neutral, there is much that women can do to improve their investment awareness and monetary well-being. For a start, it is important that women understand why we need to plan.

Building a strong financial future as a woman often involves navigating specific challenges.

Females have a longer average lifespan, so there is a need to plan for the long term to mitigate longevity and inflation risks. In Singapore, women can expect to live four years longer than men, according to the Department of Statistics.

Furthermore, women tend to be on the shorter end of the stick when it comes to the gender pay gap, a rising divorce rate, and taking career breaks for caregiving.

Here are some tips to help women gain control over their finances.

1. Close the gender pension gap

Globally, women retire with significantly less money than men, partly due to lower lifetime earnings, fragmented careers due to caregiving responsibilities, and longer lifespans. The difference in retirement income between men and women is also referred to as the gender pension gap.

But this gap can be narrowed with better planning.

• Max the match. In Singapore, schemes like the Matched Retirement Savings Scheme (MRSS) and Matched MediSave Scheme (MMSS) provide a dollar-for-dollar matching grant on cash top-ups to Central Provident Fund accounts of eligible Singaporeans with low retirement savings. If you qualify, do contribute to get the full amount. After all, it is literally free money. For MRSS, the grant is up to S$20,000 over 10 years, while that of MMSS is up to S$5,000 over five years. About 165,000 members are eligible for both MRSS and MMSS, allowing for S$3,000 in matching grants per year.
• Top-up contributions. Take advantage of top-up options allowed in CPF accounts under the CPF Retirement Sum Topping-Up Scheme and enjoy some tax relief, too.
• The 10 per cent rule: Start early with a focus on long-term investments to reap the power of compounding over the decades. This means diligently setting aside at least 10 per cent of savings for retirement goals, even while you are focused on medium-term goals like funding children’s tertiary education.

Beyond the individual level, the government and employers support the redistribution of caregiving responsibilities by employing strategies such as flexible work models, shared parental leave and flexible work hours for both genders. This way, more women can stay in the workforce and grow their nest egg.

2. Shift from “saver” to “investor”

Women tend to hold more cash than men. We are usually labelled as “risk averse”. But not taking risks and playing it safe is a risk in itself, because your purchasing power declines due to inflation over time.

What is worse, surveys indicate that more than 50 per cent of women in Singapore rate their financial knowledge at a “beginner” level.

Ironically, research shows that women often outperform men when we do invest. This is partly because women trade less frequently, which reduces transaction fees and prevents knee-jerk reactions to market volatility. Before making investment decisions, we also tend to conduct detailed research and seek professional advice more often than men.

To level up your money savvy:

• Learn more. Attend financial seminars and consume credible financial literacy content.
• Save smarter. Ensure that your savings are not left idle in a savings account earning a paltry rate of 0.05 per cent per annum. Instead, opt for a high-yield savings account, and set aside at least six to 12 months’ worth of expenses as an emergency buffer.
• Invest early and regularly. One way is to put money in a low-cost index fund via a dollar-cost averaging approach. Another possible approach is a glide path investing strategy for long-term investing, which the Singapore government recently proposed. A glide path refers to an investment portfolio that automatically shifts allocations from equities to bonds as the investor ages.
• Start young. In the earlier stages of your life, take advantage of your long-term horizon to grow your retirement funds by participating in equity markets. As you near retirement, invest more conservatively, reducing your exposure to market volatility when you can least afford it. With automatic rebalancing, the funds rebalance regularly to maintain target allocations, something many investors struggle to do on their own.
• Diversify for 2026 trends such as artificial intelligence infrastructure and sustainable energy.

3. Advocate for your worth

Employers typically use the last-drawn salary as the starting point to negotiate monthly pay. Advocate for your worth by checking out reports that benchmark salaries, such as Glassdoor, or gathering information from industry practitioners to ensure you are paid competitively.

Document your achievements and spruce up your curriculum vitae for impact. Consider standing out from your peers by including a video clip of yourself sharing your motivations, aspirations and accomplishments.

Invest in yourself using SkillsFuture credits on relevant upskilling courses. Also look for opportunities to have a side hustle that might become a full-time endeavour.

4. Optimise for long-term care

Since women outlive men on average, ensure you have sufficient long-term care insurance. In addition to the national severe disability CareShield Life scheme, consider CareShield Life supplementary plans that can offer monthly payouts of up to S$5,000 per month in the event of disability.

5. Have a “me fund”

Financial independence starts with having your own back.

It is prudent for women to maintain a separate account from their partners – one that is solely in their name. This ensures you always have the means to navigate life changes, whether a career pivot or a relationship shift, with autonomy and on your own terms.

The writer is head of financial planning literacy at DBS, and author of bestsellers Money Smart and Retire Smart