Should Men and Women Invest Differently?

Question of the week:My husband and I have an ongoing disagreement about whether men and women should invest differently. I say they do; he says they don't. Who do you agree with? --Happily Married in Boston

Dear Boston,

I'm definitely not taking sides on this one. Lucky for me, I get to say that you're both right--sort of.

I believe that the rules of good investing are gender-neutral. At the same time, I recognize that real-world circumstances (most notably, on average they live longer than men and earn less) often mean that women have to be even more diligent in following those rules to achieve the same results as men. So women should invest the same, only better.

We asked members of the Armchair Millionaire community for their thoughts on this thorny topic. Folks were generally in agreement that while there shouldn't be any difference between the sexes when it comes to investing, it does make sense to take into account the different needs of women:

Less means more. "Women have less money and have to make it stretch further. I think that the same rules of good investing apply to everyone. It's just that women have less margin for error." --Chris in California

Less aggressive approach. "Men and women should not invest differently. I would give the same investing advice to both my son and daughter. However, my daughter needs to recognize her natural tendency will be to be less aggressive in her investing, but because she will most likely live longer, she needs to be at least as aggressive as my son with her investments." --Mattchiavo

My guide highlights the unique challenges that many women face and how to overcome them.

The Armchair Millionaire Guide to Overcoming Women's Financial Challenges

• Secure your retirement. Women on average still earn about only about 75 percent of what men earn, and spend many more years outside of the work force, primarily to care for children or parents. This adds up to significantly less retirement savings for women. The solution? Be super-diligent in maximizing every opportunity to stash away retirement funds. This means your employer's 401(k), your own IRA and a taxable investment account.
• Get adequate life insurance. The average age of widowhood in the U.S. is just 56. And widows on average widow experience a 38 percent drop in their household income. The solution? If you're dependent on a husband's or partner's earnings, make sure you really have enough life insurance to meet your needs.
• Get adequate long-term care insurance. Women on average live seven years longer than men and are more likely to need long-term nursing home care. The solution? Prepare yourself for this possibility by obtaining adequate long-term care insurance.
• Empower yourself. Studies show that women tend to be less confident, more conservative investors. The solution? If you haven't already, let go of the old stale myth that a man will be there to take care of your finances. Empower yourself with education. Bookstores are chock-full of publications that will teach you how to ensure your financial future, and the Internet is packed with resources, as well. (My favorite sites for women include www.wfn.com and www.womenandco.com.) If you want help from a real person, attend an investing seminar--there are plenty available, many of them designed especially for women.

THE BOTTOM LINE: It's true that most women encounter certain financial obstacles that most men don't. But those obstacles are certainly not insurmountable. With an educated, common sense approach, both men and women can achieve the financial security they deserve.