Planning for retirement is a crucial step in securing the financial future that you desire. Retirement planning for women is even more important due to the fact they are more likely to outlive their partners and take a break from their career. They still earn significantly less than men and are investing less than their male counterparts. According to a paper written by Diane Garnick, the Retirement Gender Gap, women should be saving 18% of their income, while men only need to save 10%.
Below are four reasons why it’s even more important for women to plan for their financial future:
1.Women Outlive Their Partners
According to Statistics Canada, the average life expectancy for Canadian women is 83 years compared to 79 years for men. Based on a retirement age of 65, women can therefore expect to live in retirement 28% longer than men meaning they will require a significantly larger nest egg.
2.Women Are More Likely To Take A Career Break
Women are more likely to take a break from their career to look after children or elderly relatives. According to Garnick, women on average work 28 years while men work 38. This means women must find a way to make up financially for 10 years of being out of the workforce.
3.Women Still Earn Significantly Less Than Men
Unfortunately, women still earn less than men for equal work. In Canada, the pay gap is 88 cents earned by women for every $1 earned by men.
4.Women Aren’t Investing At The Same Rate As Men
According to Fidelty, women actually earn 0.4% more on their investments than men do yet they aren’t investing at the same rate. An article by Canadian Business estimates that high-income earning women forgo between $500,000 and $2.1 million throughout the course of their career by not investing.