Women often reach retirement age with fewer pension benefits and retirement assets than men. All workers need to save more for retirement, but women face added challenges because we have lower earnings, experience higher job turnover, and have a longer life expectancy. Women generally begin retirement with smaller pensions than our male counterparts but usually live longer than men. Our retirement pot is intended to be a supplemental source of income in retirement, but too many women are forced to rely on it as our sole source support in retirement. As a result of these issues, elderly women in the many western nations have high poverty rates.
Women Save Less than Men for Retirement
Among the reasons that women save less than men is that women earn less than men; lower earnings equal lower retirement savings. The Equal Pay Act was passed between Mid 60's and early 70's in the majority of western nations and yet half a century later, women make only 81 cents for every dollar earned by men. According to the National Women's Law Center, "This persistent pay gap translates to more than $10,000 in lost wages per year for the average female worker."
Equal pay is not just a women's issue; it is a family issue. Women make up half of many countries' workforce and mothers are the primary breadwinners or co-breadwinners in nearly two-thirds of families. Wage discrimination harms many families by limiting their economic security now and their retirement security in the future.
Women Have Different Work Patterns
Women generally spend less time in the workforce due to family care-giving responsibilities, from raising children (and grandchildren) to caring for elderly parents. Also, women are more likely to work in part-time jobs that don't qualify for a retirement plan. Such job interruptions mean less opportunity to save for retirement and to contribute to a retirement fund.
Married Women Often Rely on Spouse's Savings
It is not unusual for many married women to rely on their spouse's retirement savings. Under traditional pension plans, benefits to married workers were paid as a lifetime annuity with benefits for the spouse. You will need to understand the details within your spouse's retirement plan to find out if you qualify to claim any entitlements on that plan should your spouse pass away and you receive the benefit automatically,
You will also need to ensure you discuss the retirement fund should divorce proceedings arise, please don't just accept the house as a settlement without discussing all options prior to an agreement being reached.
Women Invest More Conservatively Than Men
Studies indicate that women invest more conservatively than men. Women tend to emphasise safety over return. They often save less for retirement and then sacrifice long term growth with a low risk investment strategy. The interest rates on a bank account will not suffice given current inflation rates.
Women Need More Money for Retirement
Women have longer life expectancies than men. Life expectancy for women now is approximately five years more than that for men. Consequently, women spend longer in retirement. For married women, 70% of them will outlive their husbands. Unmarried women (including widows) age 65 and older rely on a retirement fund for 50 percent of their total income. Because women tend to live longer than men, they are in greater danger of outliving their other sources of retirement income.
Startling Statistics
The latest Census Bureau data show a significant and alarming increase in poverty and extreme poverty among women, men and children. The shocking statistics is that 1 in 5 working women retire with $0.
Changes Needed to Close the Retirement Savings Gender Gap
• Continue to work to eradicate the wage disparities between men and women
• Increase retirement coverage for lower-wage, part-time and temporary workers
• Provide additional retirement support for women whose primary role is care-giving
• Require policy changes for countries which do not support an easy transfer of retirement funds for partners of spouses
• Allow tax-free transfers of retirement assets between spouses
• Provide investment education specific to the overly cautious investment strategy chosen by many women.
Ultimately, the basic saving strategies are the same for men and women: start saving early, contribute as much as you can to your company retirement plan and don't take money out of your retirement plan to meet short-term needs.
However, it is especially important for women to stay focused on saving for retirement as pay inequity and the work patterns of many women reduce our future retirement income.
Article Source: https://EzineArticles.com/expert/Stacey_L_Spencer/784370
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