Women at a disadvantage in retirement
Here are some sobering statistics about women and why they must 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 due to the gender pay gap; at more senior levels, women earn 39% less;
One in every two families is headed by a single mother; only 16% receive financial support from fathers;
Working women are more likely to be caught in the sandwich generation – looking after their children and their parents.
Women are living longer than men, earning less and are ill- prepared for the retirement years. Thus they’re likely to end up working well past retirement age.
Faeeza Khan at Liberty says the financial pressures on working women due to the burden of raising children and, in many cases, looking after their parents, leaves little for retirement saving. “As a result, you find many women entering their 40s with absolutely no savings whatsoever.”
Women today 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 divorce – but according to Khan, instead of preserving these savings, many spend the funds on a deposit on a house or pay off a car.
Khan says it’s 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.”
What if you have no savings at all and nothing 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 find an additional source of income, maybe a little side business to supplement your income.”
You find many women entering their 40s with absolutely no savings whatsoever. Faeeza Khan Liberty