Retirement Gender DifferencesSubmitted by Fiduciary First Advisors on February 25th, 2020
When it comes to retirement, there is evident gender separation. It has been stated that women are much more likely to face poverty in retirement than their male counterparts. There have been profound research to prove that women are 80% more likely to fall into poverty toward the end of their lives, compared to men, according to a 2016 study by the National Institute on Retirement Security. These numbers can be frightening, which is why it’s important to have a better understanding of what this means.
The Family Factor
For years, many women took time off to raise their children and build a family. While this is common and there is nothing wrong with it if it’s a choice they chose to make, it leads to part-time unemployment with reduced or no retirement plans offered. On the contrary, men often enjoy have uninterrupted work time leading to better career opportunities and in turn a better retirement plan. Starting a family is a major factor when it comes to gender differences in retirement.
Pay Gap in Genders
It is no secret that women, for many years, have been paid significantly less than men. The pay gap has raised some noise over the years, but for the most part, it still hasn’t changed. Research has shown that during their working years, on average women earn 80 cents for every dollar their male colleagues are making for the same jobs. It is because of this significant pay gap and the Family Factor that women have smaller social security payouts.
What Women Can Do
Instead of just sitting back and letting the facts stay fact, women still have a chance to have the same lucrative retirement as their male counterparts. Everyone will have different plans, but it is also extremely important to start as early as possible. No matter how small or insignificant it may seem, any amount you can put into any number of different retirement accounts will potentially grow exponentially throughout the years. It’s also important to start understanding the benefits of Health Savings Accounts (HSAs). As retirement age comes closer, health care expenses can begin to rise significantly by investing in an HSA early, you will have a tax-free cash pool in the future to pay for those expenses.
At the end of the day, women have a lot of obstacles against them when it comes to retirement, which is why it’s important for them to start taking action sooner rather than later. It is possible for women to beat the statistics and have a successful retirement.