An interesting idea surfaced about the issue of the gender pay gap that I had not thought about when I was watching the Netflix series “Explained”. The idea is that women who have children are discriminated against for being caregivers. Women who do not have children appear to not have as large of a wage gap as women who have children. This idea has some merit and means that social policy can be used to correct the problem. In Iceland, they have a government program that allows men to take Paternity leave when a child is born. In fact, if the male does not take the leave the family is hurt. According to the Social Security Administration’s 2021 Fast Facts and Figures publication, the monthly benefit of retired women workers was $1,378 per month, compared with $1,714 per month among retired men workers.
I have talked about the gender pay gap during working years.
When we look at the gender pay gap in terms of Social Security benefits,
retired women are earning about 80 cents per dollar of retired men. In this day
and age, $1,378/month just doesn’t go that far. In certain parts of the
country, it won’t even cover the cost of renting a 1-bedroom apartment.
Statistically, women live longer than men. According to the
CDC’s National Center for Health Statistics, the life expectancy of a 65-year-old
woman today is 20.1 additional years, compared with only 17.4 additional years
for a 65-year-old man. That means a 65-year-old woman today is likely to live
almost three years longer than her male counterpart. So, because women are
likely to live longer, we need to plan for more time in the workforce and/or
longer retirements.
The first step in solving a problem is recognizing there is a
problem and understanding the full dimensions of that problem. Iceland took from
the 1980s until the mid 2,000 to open up their thinking and programs to both
men and women. It is a model that could be instructive to other western
nations. The good news is progress has been made in recent decades, but
clearly, there is much more work to be done.
Public policy plays a vital role in addressing structural
issues, including continued efforts to bridge the gender pay gap, increasing
access to employer benefits to part-time workers, and recognizing (and
monetizing) the value of parenting and caregiving.
Until the government decides to give more value to parenting
and caregiving, as an individual you could:
·
assess your current financial situation and create a
budget. Develop a retirement strategy and write it down.
a. This may
sound really basic, but most people are not doing this yet. If you think about
it, it is impossible to reach a destination if you don’t have a roadmap. And
that’s what your financial plan and strategy gives you…a roadmap.
·
Consider health, welfare, and retirement benefits when
looking at a new job and if you are considering changing your status to working
part-time.
a. These are
important benefits that are part of your overall compensation package. They
bring insurance protections and the ability to save for retirement. If your
employer offers a retirement plan with a matching contribution, take advantage
of it.
·
If faced with parenting or caregiving
responsibilities, carefully consider any changes to your employment situation –
and consider working part-time.
a. This can
help you stay in the game, as an option, versus giving up employment
altogether.
·
Knowledge is power.
a. Become
educated and savvy about retirement investing, strategies for drawing down
savings in retirement/retirement income, and when to start claiming Social
Security.
b. These
decisions can profoundly influence your financial situation when you retire.
·
Build emergency savings and create a backup plan in
the event of life’s unforeseen circumstances.
a. These could
range from everything from separation or divorce or loss of a spouse/partner to
health issues and being unable to work until your planned retirement.
·
The last idea that I want to leave you with is that we
have to start talking about this. I invite you to start a conversation about
retirement security and specifically about the vulnerabilities among women with
other women and with your government representatives
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