Women and provision for retirement: what’s different?

It is little changes that make all the difference to your ultimate wealth

One of the conundrums of being a woman today is that while we have access and power that would have been unthinkable a generation ago, we’re still comparatively  disempowered on many fronts relative to our male counterparts.

The statistics will show that on average, men out-earn women in most industries. When it comes to financial services, males dominate the financial management and financial advisor space, yet it is women who historically are saddled with taking on family financial responsibilities.

Here are the facts when it comes to gender disparities in earnings:

• Women tend to earn less than men, sometimes in equivalent jobs, even today. The gender pay gap in South Africa is estimated to be on average between 15% and 17%. In turn, that means lower pension contributions and lower take-home pay
• Women are often forced into taking career breaks during child bearing years (losing ground when it comes to seniority) or make compromises such as part-time work in the interests of the family; they may also, as the default primary carers of children, agree to quit the working world altogether to raise the family’s children. Whether it’s a temporary or a permanent break, it’s difficult to ever make up for the lost income stream

So women have fewer earning years; and they are paid less. The final touch to be added to this picture is the fact that women statistically can expect to live longer than men. So women have a smaller retirement package, and a greater chance of outliving it.

It’s clear that in the interests of living well to the end, women need to understand their compromised position, and act decisively. Yet it often happens that women defer to men when it comes to financial planning. There are many reasons for this, one of which is habit. Many of us grew up in traditional homes, where the fathers earned the money and looked after it, and the mothers were given housekeeping money and looked after the home. So we reproduce that in our own homes, often all too happy to hand over the responsibilities of long-term planning to our male partners.

But it’s never good practice to leave retirement planning to a partner, no matter how the power relationship works out in other areas. For one thing, while we may expect that our partners will be with us along life’s entire journey, that may not be the case, and we may find ourselves alone, vulnerable and having to fend for ourselves at any stage of the journey – in the case of death, for instance, or if there is a divorce, or if your spouse became disabled. It is strongly advised that financial fitness became a habit borne by both partners in a household to minimise risks.

Whether you work in or outside the home, or whatever your circumstances, it’s important to be financially savvy, let financial matters be openly discussed in a manner that is transparent to all.

If you’re part of a couple, and not taking the financial lead, book “planning meetings” with your partner, ensure you are up to speed with the family’s finances, savings, debts and possible responsibilities outside the home such as taking care of extended family. Then – alone or with your partner – book a session with a financial advisor to get a sense of whether you’re on track and how you can modify your spending, insurance spending and savings to put the family, and yourself, in the best possible situation for an anxiety-free future. Let financial fitness be your women’s month resolution in 2019.

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