Tuesday March 8, 2022 was International Women’s Day and the theme for this year was “Gender equality today for a sustainable tomorrow”.
Women have made incredible strides, both professionally and personally, in the last half century. They are better educated, have greater responsibility in the corporate world and are leaders in many professions. But despite the professional and financial successes women in the workplace have earned in recent generations, they are still facing challenges.
Some of these challenges include:
1. EARNINGS GAP – on average women earn less over time than their male counterparts.
2. WORK INTERRUPTION – Women have more demands on their time than ever before. Juggling a career, caring for a family, managing a house-hold, on top of “everything else”. Because of the demands on women’s time, women typically leave the workforce more often than men, typically for extended periods of time to care for children or other family members – all very important and necessary tasks, but tasks that come at a financial cost. Because they are more likely to experience work interruption, a lot of women hold lower paying or part-time jobs that offer more flexibility but often don’t offer retirement plans.
3. SUDDENLY SINGLE – Women are more likely to outlive their spouse. 92% of women will be the primary financial decision maker at some point in their lives.
4. LONGEVITY – Women have longer life spans than men and therefore need more money and need to make it last longer.
On top of all these challenges, Women still earn, on average 89 cents on the dollar as compared to men. That means that for a man’s $70,000 salary, a woman earns just over $62,000. In fact a new study finds college-educated women make about 90 per cent as much as men at age 25 but only about 55 per cent at age 45.
While these statistics are undoubtedly frustrating, there are things women can do to get past these gender-specific obstacles and barriers to reach their financial goals? Recognizing the hurdles you might face, and building a plan around them can help.
1. EARNINGS GAP: Start saving as soon as possible. Given enough time, even a relatively small sum can grow into a sizable nest egg. Make sure you are being compensated fairly. Do your research and be prepared to negotiate.
2. WORK INTERRUPTION: During your full time working years, maximize your retirement benefits. Typically your employer may match a percentage of your contributions, which are deducted pretax from your paycheck. In other words, your boss is giving you free money for retirement – take it. Also, talk about flexible workplace options with your employer to see what they might offer.
3. SUDDENLY SINGLE: Life is always filled with change. Take personal responsibility in your financial independence and building a retirement plan. Build a financial plan that works for you as a couple today but also for each spouse in the event of a separation
4. LONGEVITY - Consider purchasing critical illness insurance or buying an annuity, which delivers a guaranteed payment until you die.
While the workforce continues to catch up to acknowledging and rewarding the unique and essential contributions to society and the economy, the team at Brandon Lindsay are definitely able to help plan for the gaps this inequality may cause. If you’d like help with your plan, please get in touch.
Mani Fenili (March 15, 2022)
Sun Life – Financial considerations for women.
Earn less than men - Source: Stats Canada, Table 14-10-0340-02 – Average and median gender wage ratio, January 2022
Hold lower paying jobs (usually part-time) than men - Global News, Women in Canada earn less than men — even for the same job: Glassdoor, December 2021
Accumulate less retirement savings & live longer than men - Forbes Advisor, How The Gender Income Gap Impacts Women’s Retirement, December 2020