Women may be better investors than men. So why do they retire with less wealth? CA Nitin Kaushik explains

Women may be more disciplined investors, but better investing behaviour does not always translate into greater wealth. CA Nitin Kaushik recently highlighted this paradox in the Indian financial landscape, pointing to factors such as lower invested capital, career breaks and a preference for low-growth assets. While women may trade less and stay invested through market cycles, fewer compounding years can have a bigger impact on their final wealth. His analysis raises an important question about what women can do to build greater financial independence.

Women may invest better, but still accumulate less wealth

CA Nitin Kaushik took to social media and highlighted what he called the “paradox in Indian investing”: women can exhibit better investing behaviour than men and still retire with smaller wealth pools. According to Kaushik, the problem is not necessarily how women invest. Instead, structural factors such as income gaps, career interruptions and excessive allocation to low-growth assets can limit how much wealth they eventually accumulate.

Women generally trade less, participate less in speculative F&O activity and are more likely to remain invested through different market cycles. Kaushik said this discipline can translate into a 0.4% to 1.8% annual risk-adjusted performance advantage. But stronger investment behaviour alone cannot overcome a smaller starting amount or fewer years in the market.

The biggest advantage may be time, not returns

Kaushik argued that the bigger issue is the amount and duration of capital being invested. Career interruptions for childcare and eldercare can take women out of the workforce during some of their most valuable compounding years. He pointed out that missing investments between the ages of 28 and 38 can potentially have a greater impact than trying to optimise investment returns later.

This is where compounding becomes especially important. Money invested earlier has more time to grow, meaning even a temporary reduction in contributions can affect the eventual size of a retirement corpus.

Why excessive safety can hurt women's wealth

Kaushik also highlighted another issue: portfolio allocation. According to him, a large share of women's independent savings remains concentrated in fixed deposits, gold and PPF. These investments can provide stability and have an important role in a financial plan, but excessive allocation to lower-growth assets can limit long-term wealth creation.

He noted that an FD offering 6% to 7% before tax may not necessarily generate significant real wealth if inflation, healthcare expenses and lifestyle costs rise faster. In his view, “excessive safety can become a form of long-term risk” when it prevents investors from achieving the growth required for long-term goals.

Kaushik's suggested investment order for India

Kaushik also stressed that financial planning needs to reflect the country and financial system an investor actually lives in. He outlined an Indian order of operations:

EPF - NPS - emergency liquidity - diversified equity mutual funds or index funds - PPF or debt - 5% to 10% gold diversification. For women, this could mean combining retirement benefits, emergency savings and diversified investments rather than allowing most independent savings to remain in low-growth assets.

Career breaks do not have to stop compounding

A career break for maternity or caregiving does not necessarily mean a woman has to sell her investments or abandon her long-term financial plan. Kaushik explained that if cash flow temporarily falls, an investor can pause SIPs without liquidating existing units and restart contributions when income resumes.

The distinction matters because existing investments can continue compounding even when monthly contributions temporarily stop. This can help women protect the wealth they have already accumulated while navigating periods when their income is lower or temporarily unavailable.

Financial independence also means knowing your money

Kaushik also highlighted the importance of financial autonomy. Simply owning investments is not enough if a woman does not know where those investments are held or how they work. He said every woman should know what assets she owns. Relying completely on a spouse or parent to manage finances can create dependence, even when the underlying investments legally belong to the woman.