Today is International Women’s Day and is a welcome opportunity to celebrate the role that women play in our lives and in our businesses.
As a Retirement and Financial planning firm we are always cognisant of the challenges that women face in their financial affairs. Some of these are outlined below:
The Gender Pay Gap
The gender pay gap – the differential between the average pay of males and females within an organisation – is estimated at an average of 14% in Ireland (Eurostat). This means that the average woman, even those in leadership positions, will be earning less than male counterparts in a similar role.
Maternity Leave and the Need for Flexible Working Conditions
Compared to men, women are more likely to leave the workforce for extended periods of time, or reduce their working hours or stop working completely, particularly those with young children. These gaps can often make it harder for women to progress in their careers as well as leave them with a reduced income.
Longer Life Expectancy
According to the Central Statistics Office, women’s life expectancy at birth is 82.8 years, versus 78.4 years for men (Life tables 2010-2012). Women also often tend to retire earlier than their male counterparts. This, coupled with gaps in employment and the gender pay gap, means it is common for women to enter retirement with less saved than men of a similar age.
A Different Attitude to Risk
While generalising an entire gender’s approach to investment is tricky territory, it is safe to say that a majority of women show preferences that differ from those seen in male investors. Women are more conservative long-term investors than men. Their primary goals revolve around keeping money safe and saving for long term goals, primarily retirement. Risk aversion may be causing many women to miss out on greater long-term returns from their investments.
So, what are some ways in which women can position themselves to successfully overcome these challenges?
Work with a Retirement or Financial Planning Professional.
As with everything else, having clearly defined goals and objectives and a plan with which to achieve them provides a degree of certainty and clarity when it comes to your financial circumstances. Developing a flexible, reviewable financial plan will provide you comfort that this aspect of your life is getting the attention it deserves while you focus on your other priorities.
Set Balanced Financial Objectives and Goals
The first step in developing a financial plan will be to set yourself financial goals for the future. A Financial Planner should be able to help you achieve a balance between short, and long-term financial goals. Short term goals such as paying off the mortgage or funding your children’s education will often take priority but should not be at the expense of a sufficient level of income to provide you with the lifestyle you wish to enjoy in retirement.
Start to consider your potential sources of Retirement Income.
- State Pension – Will you have enough contributions to qualify for the full State Pension (Contributory) when you retire?
- Existing Pension Funds – If you have a pension from a previous employer do you know how much it is worth?
- Partners’ Pension Funds -If you are married or have a civil partner do you know how much income their pension will provide in retirement?
- Returning to Work – If you are returning to work, will you be eligible to join your employer’s pension?
- Retiring – If you are approaching retirement, do you know how much income your pension is likely to provide you with in retirement?
As always we are here to help, if you have any questions about how we might be ab
