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Women tend to be at a disadvantage in retirement

Women live longer than men, earn less, and increasingly have to survive on their own – so what they do today really counts.

Here are some sobering statistics about women and why they need to start saving for their own retirement:

  • Two of every five marriages end in divorce before the 10th anniversary;
  • The mean age of a divorced woman is 44;
  • Women outlive men by 4.4 years;
  • Women earn 27% less than men as a result of the gender pay gap; at more senior levels, women earn 39% less;
  • One in every two families is headed by a single mother, and only 16% receive financial support from the father;
  • Working women are more likely to be caught in the sandwich generation – looking after their children as well as their parents.

This rather shocking reality places women at a serious disadvantage when it comes to retirement. They are living longer than men, earning less, and are poorly prepared for the retirement years. This in turn means they are likely to end up working well past retirement age.

Faeeza Khan, legal marketing specialist at Liberty, points out that the financial pressures on working women due to the burden of raising children and, in many cases, looking after their parents, leaves little left over for retirement saving.

“As a result, you find many women entering their 40s with absolutely no savings whatsoever,” she says. “In this day and age, they are increasingly likely to be divorced, and receive no financial support from the ex-husband.”

Women in the modern era are far more likely to get divorced than their parents’ generation. They may have access to a portion of their ex-husband’s retirement fund at the time of divorce – but according to Khan, instead of preserving these savings, many spend the funds by putting down a deposit on a house or paying off the car.

From a legal point of view, the most common type of marriage contracts are in or out of community of property with accrual, meaning the wealth accrued from the date of marriage is shared equally on divorce.

Both allow the divorced woman to share equally in the wealth accrued during the marriage. Khan says it is important for women to preserve their portion of the ex-husband’s retirement savings in the event of divorce, and avoid using this as a cash windfall to be spent on anything other than retirement savings.

The best option however, is to save 15% of your net salary, starting with your very first pay cheque, adds Khan, and to maintain this at 15% as your salary increases. “It’s important to never touch these savings for emergencies, which will always pop up. This is what we mean by paying yourself first. You put your 15% savings away before you pay rent, car or groceries. Once you start to do this and see your savings grow, it becomes natural and easy to do.”

What if you have no savings at all and nothing left at the end of the month to save?

“Then you are living beyond your means,” says Khan, “and have to do one of two things: bring your expenses under control, or look for an additional source of income, maybe a little side business, such as baking or catering, to supplement your income.”

The idea of ‘retirement savings’ is often looked upon with dread by women, since it conjures images of old age and decrepitude. But consulting a financial adviser is an opportunity to redefine your life’s goals, and rekindle those dreams that have been held at bay while bringing up the kids and working on a career. Perhaps you still want to climb Kilimanjaro, or attend the next Soccer World Cup in Qatar.

“Everyone should have goals like this, since these are the rewards for working hard and saving – which is really foregoing pleasure now to enjoy at some future time,” says Khan. “If going to the Qatar World Cup excites you, then you have roughly four years to plan and save for this. Woman should find a financial adviser who can help them achieve these goals and monitor their savings progress through the various stages of their careers.”

It is vital to start developing the habit of saving, she adds. “Many women say they cannot afford to save 15% a month. This is usually not true. It is other things they cannot afford. They are living day-to-day with no regard for the future. There are lots of products available to them to assist in developing the culture of saving.”

Brought to you by Liberty.

Disclaimer:

This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice.  The material has been created for information purpose only and does not contain any personal recommendations. While every care has been taken in preparing this material, no member of Liberty gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information presented. The writer, although an appointed representative of Liberty Group Limited, is not allowed to sell financial products.  Please consult your financial adviser should you require advice of a financial nature and/or intermediary services.  Liberty Group Limited is a Registered Insurer and an authorized Financial Services Provider (FAIS no 2409).

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“Women earn 27% less than men as a result of the gender pay gap; at more senior levels, women earn 39% less;”

Can we stop with this nonsense? This has been disproven so many times already, yet feminists still persist with this blatant lie.

~~~~~~~~~~~

“Two of every five marriages end in divorce before the 10th anniversary”

According to US statistics, it’s between 70-80 if women who file for divorce.

~~~~~~~~~~~

“One in every two families is headed by a single mother, and only 16% receive financial support from the father;”

How many of these women know who the father is? There are women that have children out of wedlock and then don’t know who the father is.

~~~~~~~~~~~

Long story short, women should get their act together and start PLANNING.

If you are left with no savings at the time of retirement, it’s basically because of bad planning. You have to be ever vigilant, plan for all the ‘ifs’ and continuously go over your finances.

“Women earn 27% less than men as a result of the gender pay gap; at more senior levels, women earn 39% less;”

I would love to see the research behind this because I find it hard to believe. It would have to be a like for like position comparison and all in pay. You can not take the total salary of woman and compare to the total salary of men within a company and say hey look it’s different. That is meaningless. I therefore agree it has at least not been proven.

This reminds me of the Serena Williams article on here where the writer mentioned how she worked at a radio station with another well known host and he got paid more, she seemingly didn’t understand why. It was because he was very well known and she wasn’t, seems obvious until you throw in a bit of crazy socialist elements.

Absolutely. Ongoing disinformation that needs to stop. Women are not PAID less than men, they EARN less than men. This has everything to do with choices. Women tend to choose careers like social work, teaching and nursing whereas men tend to choose engineering, science and aviation. Women take time off to have children.

Bottom line is work hard to make your marriage work. This makes retirement goals much easier to achieve for both parties.

Also marry someone that has the same attitude towards saving.

Thanks goodness for the disclaimer and the fact that it is another poorly produced article under the umbrella of Liberty. Some of the statistics seem a bit unsound as presented in the piece

The advice from the Liberty Specialist is no more than theory.
I personally know of no one who could afford to save 15 % of their income from their first pay cheque – and they definitely weren’t living beyond their means. They were surviving – me included.
The financial advisers mentioned in this article must have Harry Potters wand in their pocket.
I managed to start saving at age 40 (without the help of an adviser), retiredat age 60 with a Capital Base of 40 x Annual Earnings.
I particularly stayed away from a Life Annuity – which at best had a rate of 8 % = equal to cash.
Think it through – don’t rush it – but you do need the Capital.

Taffydee I would appreciate it if you could advise on how you saved from age 40, meaning which funds/products as I also don’t trust financial ADVISORS, they are always in it for themselves/highest commission. Thanks

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