Gender Pay Gap

The following was published by the American Association of University Women and it is entitled the Simple Truth about the Gender Pay Gap. I have talked in the past about how it is unfair and not economically sound to continue to have women paid less then men. The information below supports this

Over half a century after pay discrimination became illegal in the United States, a persistent pay gap between men and women continues to hurt our nation’s workers and our national economy.

The typical woman in America earns $45,097, while the typical man makes $55,291.

Women of color often fare even worse. Compared to white, non-Hispanic men:

Black women make 62 cents on the dollar.

Hispanic women make 54 cents on the dollar.

Asian women make 89 cents on the dollar.

Native Hawaiian or Other Pacific Islander women make 61 cents on the dollar. *

American Indians or Alaska Natives make 57 cents on the dollar. *

(*AIAN and NHPI numbers are from American Community Survey (ACS) data; the other reported racial groups are from Current Population Survey (CPS) data.)

The pay gap increases over the course of a woman’s career and is widest for women ages 55-64. This likely reflects the long-term effects of direct and indirect discrimination, which compound over time.

 Women’s retirement income is only 70% of men’s, suggesting that the pay gap affects women’s economic security now and in the long term.me.

What Contributes to the Gender Pay Gap?

Women do not make less money simply because they choose different careers than men or choose to become mothers. Rather, the undervaluing of women’s work, implicit bias against working mothers and direct race and gender bias diminish women’s salaries. Some employer practices can make disparities even worse. These factors contribute to the pay gap:

Occupational segregation: Women and men still tend to concentrate in different jobs and fields. And jobs traditionally associated with men generally pay better than traditionally female-dominated jobs. These jobs do not pay less because they require fewer skills; they pay less because women do them. Further evidence that women’s work is undervalued: when an influx of women enters a previously male-dominated profession, wages for the occupation as a whole decrease.

Motherhood penalty: Mothers who work full-time are typically paid 69% as much as fathers. Mothers receive lower salaries than fathers and other women—even if the mother never left the workforce. Many working mothers experience bias in pay because of gendered norms and expectations about their roles. And many workplaces are still built on a model that assumes a worker is not a primary caretaker. Lack of paid family, medical and sick leave contribute to the problem.

Gender and race discrimination bias: Direct discrimination and bias against women remain culprits in the pay gap. And the intersectional impact of race and gender biases contributes to the larger overall pay gap for women of color.

Lack of pay transparency: Certain workplace practices can exacerbate pay disparities, including the failure to be transparent with salary information, retaliation for wage disclosure, and the use of prior salary history in setting pay. The pay gap is smaller for workers in sectors where pay transparency is mandated: For example, federal government workers experience a 13% pay gap between men and women; in the private, for-profit sector, that number jumps to 29%.

What is the Impact of the Gender Pay Gap?

Women are the sole or co breadwinner in approximately two thirds of American families. So, when women bring home less than they have rightfully earned, it hurts women, their families, and the economy as a whole.

Women also have less money to pay off educational debt, which contributes to the fact that they hold two-thirds or approximately $929 billion of the nation’s $1.46 trillion student debt. The debt they hold is also made worse by the fact that women overall receive less educational assistance income than men.

This disproportionate debt burden can force women to put off saving for retirement, buying a home, or starting a business.

When underpaid throughout their careers, women are more likely to face financial insecurity in retirement, making women’s retirement years more precarious. The pay gap also acts as a drag on America’s economic growth. According to Institute for Women’s Policy Research’s (IWPR) original analysis of 2016 data, paying women equally would have added $512.6 billion to the national income. IWPR has also determined that closing the gender wage gap would reduce poverty in families with a working woman by half.

What Can We Do to Close the Gender Pay Gap?

 Congress should pass the Paycheck Fairness Act, which would update and strengthen the Equal Pay Act of 1963; the Pay Equity for All Act, which would prohibit employers from using salary history to set pay; and the Fair Pay Act, which would require employers to provide equal pay for jobs of equivalent value to help reduce the impact of occupational segregation.

 Congress should pass the Family and Medical Insurance Leave (FAMILY) Act, which would create a national paid family and medical leave insurance program for all workers and the Healthy Families Act, which would guarantee paid sick leave. Congress and institutions should also find ways to invest in affordable childcare.

 Policymakers should also protect and expand Pell grants for low-income students, champion tuition- and debt-free options for students, support income-driven repayment options and allow for expanded public interest loan forgiveness programs.

 The U.S. Equal Employment Opportunity Commission (EEOC) has indicated it will stop collecting pay data from employers. Implemented by the Obama Administration, the pay data collection identifies trends in pay disparities based on sex, race and ethnicity. The EEOC should not roll back this program; it must properly collect and sufficiently analyze data on pay disparities.

 More states need new and stronger pay equity laws and enforcement. As of October 2019, 42 states considered bills to help narrow the gender pay gap; 11 states passed laws. In 2018, 40 states and Washington, D.C. considered pay equity legislation, and six states enacted new laws.

 Employers should conduct regular pay audits, post salary ranges for jobs, eliminate the use of salary history to set wages and prohibit retaliation against employees for discussing, disclosing, or inquiring about their wages.

 Individuals can help to negotiate their own financial futures by taking an AAUW Work Smart salary negotiation course in-person or online.

Retirement is it our of your reach?

The following is from an idea from Forbes magazine, called is this the end of retirement.

The unemployment rate is higher than it was in the 1930s, many workers are facing uncertain futures as businesses close and some jobs will be lost forever. During the 2008-2009 turndown and in the 1930s and I think every major recession since older workers are going to be hit the hardest, as employers look for ways to cut costs. One way to do this is to hire younger workers at lower wages and force older workers into retirement. In the United States according to Ms. Barnes, the author of the article, and others age discrimination in hiring, is perfectly legal under federal law.

As an economy comes out a recession the Economists watch the Re-employment rate. This is the rate at which distinct groups are called back to work or get new jobs. According to the Organisation for Economic Co-operation and Development older workers (aged 55-64 years) also have a higher incidence of displacement than prime-aged workers in many countries, after controlling for other factors, older workers have a significantly higher risk of displacement than prime-aged workers in all the countries for which data are available. Their chances of finding equivalent new work are slim. According to the U.S. Bureau of Labor Statistics, the re-employment rate was 76 percent for workers ages 25 to 54 in January 2018. For those aged 55 to 64, the re-employment rate was 60 percent and for those aged 65 years and above it was a mere 31 percent.

Many spend down savings, work low-paid gig jobs that offer few, if any, benefits, and start collecting Social Security as soon as they become eligible, thereby losing up to a third of their potential benefits. Many in the United States are bankrupted by their healthcare “system.”

The Pew Research Center reports the COVID-19 outbreak has swelled the ranks of unemployed Americans by more than 14 million, up from 6.2 million in February to 20.5 million in May 2020. As usual, women suffer disproportionately, with 14.3% unemployment compared to 11.9% for men.

Even in the best of times, unemployed older workers, women, or men have difficulty finding new jobs.

The potential for harmful age discrimination in the months ahead is heightened by the fact that federal courts have effectively barred older workers from pursuing valid age discrimination claims.

The courts have left most older job applicants vulnerable to systemic age discrimination in hiring, including the widespread practice of targeting job advertisements to younger workers via social media.

The bottom line is that many more Americans can be expected to face a bleak old age in the coming years due to back-to-back economic catastrophes. Workers' lives are not unlimited. Many will be unable someday to drive for a ride-sharing service or pet sit.

The odds are stacked against older workers who tend to be more conservative in their political leanings. In many countries with Conservative or right-wing governments, these governments tend to work with business against the best interests of older workers. To change the situation older workers, need to think hard about which candidate or party deserves their support.

Lets change the song

I receive Google alerts about retirement and every day there are stories that have the same theme. How tough it is for women to save for retirement; women are more likely than men to end their days in poverty than men; women have it tough when it comes to finances.  

The stories usually follow this format: 1.) Women make less than men, 2.) women are in the labour force for less time and therefore work less than men, 3.) women live longer than men, 4.) women don't invest as much as men, 5.) when women invest, they are more successful than men. 6.) women need to save more, 6.) women need to learn more about money. The structure may change but the theme is the same, blame women for their inability to save enough for retirement. Here are a few excerpts from some stories that came in on one day.

Story One--Financial strategies for women over 50 can help

Not only do they make substantially less than men, overall, but they also spend less time in the workforce, carry higher levels of college debt and often don’t have access to a retirement plan at work.

All these things, in addition to others—serving as caregivers for family members (and devoting not just time but precious income to help them), having less money with which to save for retirement, having to get by on lower Social Security because of years of lower-income—all come together to create a perfect storm at retirement for many.

Women are more likely to end their days in poverty and to spend whatever they might have less on long-term care (since they’re usually the caregivers, there’s seldom anyone around to care for them when they need it).

Story Two-Women at risk of 'financial meltdown' due to lack of individual pension rights

Women of all age groups are at risk of a “financial meltdown” in the event of a relationship breakdown because of their lack of individual pension rights or even financial plans, according to new research by Royal London. 

According to a YouGov survey specially commissioned for Royal London, approximately 45 percent of women living with a partner said they were either not confident or did not know if their long term financial plans would be adequate if their current relationship failed. Just 34 percent of men felt the same way.

Royal London pensions specialist, Helen Morrissey said the findings are “extremely worrying” and show that “we have a long way to go to ensure women are building resilient retirement plans”.

Story Three--The top money tips for older women

Question Do younger and older women differ, in how they understand and handle money?

“The irony is that your need for safety gets in the way of true financial security.”

I find that younger women are more open and transparent about it. They have to deal with a lot of issues as young adults, like student debt, and they talk about it as a way to find solutions. Older women are not as open, because they have accumulated years of baggage, and have been told their whole lives not to talk about it.

Story Four---More Women Growing Old Poor In Phoenix, Mirroring National Trend

More and more women are growing old poor. That’s according to a report by the national advocacy group Justice in Aging. In Phoenix, the reasons why mirror what’s happening nationally.

The problem is these stories don't tell the correct story. We need to change the story and the song. The facts are that we pay women less than men, and that is one of the main reasons women put less away for retirement. The story has to be shifted so we start talking about paying women the same as men. Now I know that most men are not great at saving for retirement but we have a head start because we make more money.  It is, in my humble opinion, scandalous that even though we have had laws on the books for over 50 years, women are not receiving equal pay for equal work.   Boomer women are retiring alongside Boomer men and since they will live longer their well being will be a major crisis for society in the next few years.

In the United States, there had been The Equal Pay Act since 1963. It is a United States labour law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex. It was signed into law on June 10, 1963, by John F. Kennedy as part of his New Frontier Program. However, this law some 56 years later has had no effect on women’s wages overall. Sad and destructive to our economic well being. 

In Canada, Ontario has a similar act. Under the Employment Standards Act, 2000 (ESA), subject to certain exceptions, an employer cannot pay one employee at a rate of pay less than another employee on the basis of sex when they perform substantially the same kind of work in the same establishment, their work requires substantially the same skill, effort and responsibility and their work is performed under similar working conditions.

Let's not spend too much energy wringing our hands because women cannot save enough for retirement lets focus our energies on working to ensure that women are paid the same as men when they are working. That is the crises we need to spend time and energy on. and when we get to the point when we pay women equally,  over time women will be in the position that they need not worry about ending their lives in poverty.

Women's Risk in LIfe by the Chartered Insurance Institute Part 4

Potential generic areas of intervention for the profession, identified in this interim report include the following:

·       Education and awareness – Educating and raising life risks awareness amongst young men and women, and of the risks associated with not engaging with, and taking ownership for managing, their respective risks in life.

·       Equality oriented solutions – Access to risk solutions, including advice, services and products, that allow for equality between men and women – such as savings and investment products that address individual’s needs, circumstances and risk appetites – even when earnings’ disparities exist within relationships.

·       Specific risk mitigation – Specific risk solutions for particular circumstances to allow women in complex situations (such as dependent partners suffering violence) to both protect and empower themselves.

·       Employer solutions – Engaging with employers, and developing new and improving existing workplace risk solutions for employees – these may benefit solutions funded by employer or employee funded options, both aiming to support closing the women’s protection gap.

·       Effective engagement – Improved engagement with women, empathetic with women’s approach to risk, addressing their expectations and preferences in regard to informed and individual advice – through face to face, telephone as well as new and technology-based interactions.

·       Building trust and relevance – Improving the image of the profession and making it more appealing to women.

Women get equal pay for equal work in New Zealand

The following is from the Otago Daily Times out of New Zealand. New Zealand just made a tremendous move toward finally giving women equal pay for equal work.  This move will help women now and will also help them save toward their retirement. New Zealanders should be proud of this move.

The government announced a $2 billion package (over five years) will substantially increase the pay of some 55,000 state-subsidised low-paid care workers (who are mainly women) in the aged residential care, home support, and disability sectors. The payments will not be backdated, but, from July, workers on the minimum hourly wage of $15.75 will get least $19, a 21% rise.

The settlement is the result of caregiver Kristine Bartlett's 2013 case to the Employment Court (it also went to the Court of Appeal and Supreme Court), which found her low hourly pay rate (then $14.32) was a result of gender discrimination under the Equal Pay Act. It reinterpreted the Act as applying to equal pay for work of equal value, not just the same pay for the same work.

The Government is now leading the world on this issue. It is certainly important to work with the private sector. Businesses will inevitably be worried about any flow-on effect which might cost jobs and close businesses.

Yet when some are posting healthy profits in a growth industry like aged care, it is hard to buy into the arguments. Likewise, the Government's surplus means it shouldn't be a case of robbing Peter to pay for Paula but redistributing the wealth in a more equitable manner.

More money to women means more money to families and children (and it is likely to be money spent locally). It also means women have more chance to put money towards vital retirement savings and the like. Surely everybody wins?

The message the settlement sends about value (of women, their work and those they look after) reaches far beyond the pay packet. In the changing world of work, private businesses will simply have to adapt - especially if their workers now have other options.

Although forced to act, the Government has again stolen the traditional social policy ground of Labour. Its announcement mere months away from the general election may help it cash in on its investment.

Gender pay gap

In July of last year, I talked about the gender pay gap and the impact it has on retirement. In the United States  in 2014, women working full time in the United States typically were paid just 79 percent of what men were paid, a gap of 21 percent? The gap has narrowed since the 1970s due largely to women’s progress in education and workforce participation and to men’s wages rising at a slower rate. But progress has stalled in recent years, and the pay gap does not appear likely to go away on its own. I gathered the facts for this post from here. I also think we should support The Canadian Women’s Foundation for the work they do to help women in Canada.

The problem is not going away and the problem can be typically measured in three different ways  and in Canada it is so those who want to paint a bleak picture use method one, while those who want to paint a progressive picture use method three. No matter which calculation is used, the wage gap clearly exists.

Method One: Compare the annual earnings, by gender, for both full-time and part-time workers. On this basis, women workers in Canada earn an average of 66.7 cents for every dollar earned by men.This measurement results in the largest wage gap because more women work part-time—and part-time workers earn less than full-time workers.

Method Two: Compare the annual earnings of full-time workers. On this basis, women workers in Canada earn an average of 72 cents for every dollar earned by men.

Method Three: Compare the hourly wages by gender, including those for part-time workers. On this basis, women earn an average of 87 cents for every dollar earned by men.    

Depending on how you calculate the gender wage gap, you can calculate women’s lifetime earnings compared to men’s. Based on a gender wage gap of 31.5% in Ontario, a woman would have to work 14 additional years to earn the same pay a man earns by age 65. 

Another method of calculating the gap is used in the European Union. In the EU, the gender pay gap is the difference in average gross hourly wage between men and women across the economy. The average gender pay gap in the EU is 16.3%, so Canada is ahead using this method.

The percentage of working women in Canada has increased from about 42% to almost 60% over the last 30 years. This increase has not been handled well by employers or by government policy leaving women at an incredible disadvantage. 

The gap exists and there are many reasons why it exists, some are:

Women’s skills and competences are often undervalued, especially in occupations where they are in the majority. This results in lower rates of pay for women. For example, physical tasks, which tend to be carried out by men, are often valued more favourably than those carried out by women. For instance, a female cashier in a supermarket earns less

than a man working in the stockroom. 

When women are the majority in a small number of occupations, they receive lower wages. The opposite is true for men, as the more they dominate an occupation the higher

their pay. For example, where women are clustered into female dominated occupations, such as cleaning, they tend to earn less than men who have comparable skills in male

dominated occupations, such as refuse collection. 

Women’s skills are often undervalued because they are seen to reflect ‘female’ characteristics, rather than acquired skills and competences. For example, a female nurse earns less than a male medical technician, even though they have comparable levels of qualifications. This can result in a gender bias in the setting of wages and in assessing the

value of the work that women do.

Many Canadians believe the myth that traditional “women’s work” should and does pays less than traditional “men’s work.” As one researcher notes: “Female-dominated job classes are often seen as not being skilled because the tasks are related to domestic jobs that women were expected to carry out for free in the home."  So because women did this   work employers have been given the freedom to  pay lower wages to women in these positions and governments have not felt any political pressure to make sure equal pay for equal work is the norm in the workplace.

Second, most women workers are employed in lower-wage occupations and lower-paid industries. Women work in a narrower range of occupations than men and have high representation in the 20 lowest-paid occupations. About two-thirds of the female work force are concentrated in teaching, nursing, and health care, office and administrative work, and sales and service industries.Women aged 25 to 54 accounted for 22% of the Canada’s minimum-wage workers in 2009, more than double the proportion of men in the same age group.

Another reason for the wage gap is that more women than men work part-time. About 70% of part-time workers in 2013 were women, a proportion that has remained steady for three decades.Women working part-time or temporary jobs are much less likely to receive promotions and training than those in full-time jobs.

Women work part-time for several reasons, including lack of affordable child care and family leave policies, along with social pressure to carry the bulk of domestic responsibilities. These factors make it more likely for women to have interruptions in employment, which has a negative effect on income.

A large portion of the wage gap remains unexplained and is partly due to discrimination. An estimated 10-15% of the wage gap is attributed to gender-based wage discrimination. Wage discrimination and employment discrimination refer to different things. The Pay Equity Act  of Canada requires employers to ensure men and women receive “equal pay for work of equal value.” The Employment Equity Act requires that employers remove barriers to the workplace for women, aboriginal people, members of visible minorities, and people with disabilities.

The wage gap matters because women’s lower earning power means they are at a high risk of falling into poverty if they have children and then become separated, divorced, or widowed. They are less able to save for their retirement and more likely to be poor in their senior years; in fact, women 65 or over are more likely than their male counterparts to live on a low income.  The risk of falling into poverty means that some women are sometimes forced to stay in abusive relationships, despite the danger.

When women work outside the home and also do most of the domestic work, their long-term health suffers. According to Statistics Canada, women at every age are more likely than men to describe their days as “quite a bit” or “extremely” stressful.

Greater equality between men and women would bring benefits to the economy and to society in general. Closing the gender pay gap can help to reduce levels of poverty and

increase women’s earnings during their lifetimes. This not only avoids the risk of women falling into poverty during their working lives, but also reduces the danger of poverty in

retirement.

Women have rising expectations for their working lives and, if companies want to attract the best talent, equality at work is a must. It is essential to creating quality jobs and a highly-motivated workforce. Quality jobs, in turn, are crucial to building a positive working environment where all workers are valued for their work.

Employers can benefit from using women’s talents and skills more effectively, for example by valuing women’s skills and through introducing policies on work-life balance, training

and career development. Women have skills and talents that are often under-utilised in the workplace and unlocking

these can help companies tackle skills shortages. Valuing women for the work that they do and rewarding their skills and potential fairly can improve a business’ performance

and effectiveness, for example, by attracting and retaining the best and most talented staff and creating a positive image with customers.

Companies that build equality plans and strategies into their workplaces create the best workplaces for everyone, male or female, to work in. Having a positive working environment

helps a business to attract customers, improve performance and boost competitiveness. 

The Gender Divide in Retirement

According to a British Study called the  2016 Readiness Report, women are still significantly behind men when it comes to being prepared for their retirement. The UK’s average readiness score is currently sitting at 51. However, while men have a readiness score of 54, women have an average readiness score of just 49. On first glance, it might not seem like the gap is as wide as you might expect. Here some information from the report: (for the full report go here Pdf file)

How ready are you for retirement?

Pensions have graced the cover of almost every newspaper in the UK in the past 12 months, and there has certainly been a significant amount of column inches dedicated to the topic. But, the problem remains. Lack of preparation for retirement in women certainly has roots in previous employment patterns and social norms, and women are still more likely to have career breaks than men to care for family. However, there is also a lack of pension awareness across both men and women and a need for change.

Traditionally, women have relied on a spouse to provide for their retirement, but in today’s age of independence and equality, there is a need for women to take responsibility for building up their own pension pot. 

People reaching State Pension Age after 5 April 2016, will build up a State Pension based on their own national insurance contribution record, and apart from some complex transitional arrangements, it won’t be possible to inherit a spouse’s pension. It is increasingly important that both government and industry make a concerted effort to further encourage women to plan for life after work. Currently, women on average tend to live 3.7 years longer than men and they will need to make sure they have an adequate retirement income to live on.

The Readiness report research shows that women typically aim to retire aged 64, which is problematic given that by 2020, the state pension age for women will have risen to 66, if they don’t have private pension savings to fill the gap.

Retirement Plan Basics

I find that the web site Wiser Women has good information for men as well as women. They are a rich resource for anyone thinking/planning to retire. Their focus is on the needs of women, but men can learn from the ideas they post as well.

These resources will help you to understand the different types of retirement plans and what you should do to make sure you get the most out of your plan.


Here are some important questions to ask regarding related retirement plans:

What Women (And Men) Need to Ask Themselves:

Want to change you retirement plan? Which plan could you roll it into? Our chart lets you know!
Have you diversified your investments?
Do you know what the value of your investments is expected to be at retirement?
Have you planned how you will manage payouts from an employee savings plan, such as a 401 (k) plan?
Have you provided for ways to protect your assets, such as through life, disability income or long-term care insurance or by purchasing an annuity?
Want to change you retirement plan? Which plan could you roll it into? Take a look at our chart to the right to find out!

What Women Need to Ask Their Spouses (and that men need to be clear on)
Have you earned a pension(s)?
Do you know how much the pension will be upon retirement?
Will we receive a benefit in the event that you become disabled or die?
Do you know how much that benefit will be?
Will I receive a benefit if you die before me? If so, what amount?
When are you entitled to retire and receive a full or partial pension benefit?
Do you know whom we can talk to at work about this?
When should we discuss our overall retirement strategy to plan for our future?
Does your job allow you to save through a tax deferred savings plan such as a 401(k) plan or a 403 (b) account?
Do you have an Individual Retirement Account? Am I the beneficiary?

What Everyone Need to Ask Their Employers:
Does the company offer a pension plan? A savings plan?
Am I eligible for the pension plan?
Is the pension plan integrated with my Social Security benefit?
How long does it take to earn a legal right to the pension?
Do we have a tax deferred savings plan such as a 401(k) or a 403(b)? Does it offer employer matching contributions?
What will the present day value of my pension if I consider changing jobs today

Gender gap in retirement income

There is a gender pay gap, it  is a real phenomenon, but it has beeen overshadowed another inequality that has the same potential to threaten the long-term financial stability of women: the glaring gender gap in retirement savings.

In the USA in 2011, the average IRA owned by a man had a balance of $114,745 while the average balance for a woman was $66,529. At age 70, median balances were $72,971 for men and $42,926 for women.

There are several reasons why women need to save more aggressively than their male counterparts. Here are some:

1. Women often have fewer years in the workforce

Many women don't earn as much as men and often end up working less because they take time off to have children at some point during their careers. This means in order to have more in retirement, more of income earned while working needs to be saved according to financial planners. Tough when money is needed for running the home, easier if  a women is in a relationship where both parties contribute to the home. A better solution, pay women more money when they are working, close the gender gap.

2. Women may be more conservative in their investments

Women have a tendency to be more conservative then most men, when investing. While conservative investing can keep money safe, it may also mean women don't earn high enough returns to build a comfortable nest egg. The conservative approach works because women tend to ask more questions and be more likely to stick with their investment decisions, which can be a good thing in a tumultuous market environment. Women may be encouraged to take larger risks when investing, but this only benefits the sellers of financial products. Over the long term a conservative investor can do well if they aim for a rate of return that is one or two points higher than inflation.

3. Women don't necessarily plan for themselves

Whether it be letting a man make their investment decisions or thinking a husband's Social Security or pension will sustain them, many women make the mistake of not being in charge of their own retirement plans.

Part of the problem may lie with advisers who assume men are the decision makers. Women shouldn't be afraid to speak up during investment discussions and they should seek out women who are professional money managers, as many men discount the opinions of women when it comes to investing.

Women live longer than men so about 50 to 60 percent of women will be single (at some point) in retirement. Those women might be divorced, widowed or single by choice. Regardless of the reason, they need to be prepared to care for themselves during their final years. 

5. Women may place others' needs ahead of their own

It's unfortunate that children and grandchildren may not feel an obligation to help their mothers and grandmothers because, in some cases, those older women may not have retirement savings since they prioritized their families above themselves.

Men when asked to name a common mistake women make  about investing is that women worry about everyone else and do not put themselves first.

That means college funds get money before retirement plans, and family needs are placed before savings and this is needed in today's economy but women should still put themselves first.  The old adage, pay yourself first still applies when you are retired and women need to consider themselves as well as their loved ones and families. Helping loved ones, should never mean putting yourself at risk.

If enough women take control in these ways, the gender gap in retirement savings could become a thing of past.

Women Showing Greater Commitment to Retirement Savings

A survey by MassMutual Finds  that women are beginning to take retirement savings seriously.

Women have long trailed men when it comes to retirement savings but new data from MassMutual Retirement Services shows that women are responding to the challenge and are closing the gap.

Data from marketing campaigns and employer-sponsored retirement plans shows that women are responding more favourably than men to initiatives encouraging retirement saving, especially women aged 18-34, MassMutual reports. Retirement saving rates among women are also catching up to those of men, but women's average salary deferral or savings rates still lag behind those of their male counterparts.

"The longer-term trends show women are taking retirement savings more seriously and in some instances are now eclipsing men," said Elaine Sarsynski, Executive Vice President, MassMutual Retirement Services. "MassMutual is seeing increases in the rates that women respond to campaigns to boost their retirement savings. We're now finding that women's retirement savings account balances in defined contribution plans such as 401(k)s are climbing faster than men's."

MassMutual provides services for approximately 37,000 retirement plans with 2.8 million participants and a total of $148 billion in assets under management as of June 30, 2014.

MassMutual, in analysing its data on retirement plan participants, found that the average retirement savings balance for women was up 17 percent from a year ago and 71 percent from 2009. The gap between the average balance between women and men narrowed to 37.8 percent in the second quarter from 40.5 percent in 2010.

Earlier this year, a campaign sponsored by MassMutual to encourage retirement plan participants to increase their deferral or savings rates yielded higher response rates for women than men. Younger women aged 18-34 led all retirement savers who increased their deferral rates. Women in this category increased their response rates by 38 percent from 2013 and 55 percent from 2012. Women aged 35-54 also showed more interest in retirement savings, with response rates rising by 42 percent from the same time last year.

MassMutual is seeing greater interest in retirement savings on the part of women overall and younger women in particular because the firm has been able to more tightly segment specific target markets and appeal to narrower demographic groups on their terms, according to Sarsynski. Retirement-saving messages, graphics, images and photos and delivery vehicles are being tailored to fit market segments to better connect with retirement plan participants, she explained.

While those marketing efforts are gaining traction, the average salary deferral rate for women continues to trail men, 5.37 percent to 5.70 percent of compensation, respectively. However, the deferral rates for women have remained fairly steady since 2010 while the rates for men have declined.

Women and retirement basic

Why Women Are Falling Short: Some Basics

To spend their retirement years in comfort and security, women must start planning early. The first step in this process is understanding why retirement security is so elusive by looking at some of the most basic and troublesome facts about women’s earnings, work status, life expectancy, marital status, and retirement income:

Earnings

• Two-thirds of working women earn less than $30,000 a year.

• Nearly half of all women work in low-paying jobs without retirement plans or 401(k)s.

• Women earn on average 77 cents for every dollar earned by men.

Work Status

• Women are more likely than men to work part-time. Part-time employment is associated with lower wages, fewer opportunities for promotion, a lower likelihood of pension coverage and eventually smaller benefits.

• Over a lifetime, women will spend 27 years in the workforce, compared to almost 40 years for men.

Life Expectancy

• Today, an average woman’s life expectancy at birth is 80.1 years, compared to 74.8 years for men. If a woman lives to age 65, she can expect to live until the age of 84 or 85―about four more years than a man.

Marital Status

• Between the ages of 75 and 84, only 34 percent of women are married with a spouse present. For women age 85 and older, only 13 percent are married with a spouse present.

• With the death of a spouse, a woman often experiences a steep drop in income—from her spouse’s pension and even from Social Security.

Retirement Income

• The median income in 2004 for retired women was $12,080 compared to men’s income of $21,102.

• The poverty rate in 2004 for single white women age 65 and older was over 20 percent; that rate was double for single African American and Hispanic women.

• Social Security continues to be the only source of income for one in four unmarried women.

The Three Legs of the Stool

Many older women rely on Social Security as their primary or only source of retirement income—it keeps almost 40 percent from falling into poverty. However, Social Security replaces only 40 percent of an average worker’s wages. That 40 percent is not enough alone, and the fact that they are without other sources of income such as pensions or savings is one of the major reasons why so many older women live at poverty’s door.

Private pensions and retirement savings plans such as 401(k) or 403(b) plans are the second leg of the retirement stool. They are a valuable part of a retirement income package, but they are not always available to women. Less than one-third of retired older women today receive pension income. And the situation is not improving. Less than half of working women have access to a private pension or retirement plan at their jobs. Additionally, women often leave jobs before vesting in a pension benefit, and because the dollar amounts they receive are smaller, they tend to spend all or part of any lump sum distribution they receive from 401(k)-type plans.

The third leg of the retirement security stool is individual savings. Because of the changing nature of employer-provided pensions and savings plans, women must save on their own and save more than men—not only because they live longer, but also because they are more likely to have higher expenses for health care, long-term care and prescription drugs. Unfortunately, women’s lower average earnings and more time out of the workforce for care giving make it difficult for them to save the amounts needed for retirement.

The following checklist is drawn from the work of the Committee of Post-Retirement Needs and Risks of the Society of Actuaries and the content and recommendations in the report, “Public Misperceptions about Retirement Security,” published in 2005 by LIMRA International, Inc., the Society of Actuaries, and Mathew Greenwald & Associates, Inc. The Committee has identified the areas in which the public does not understand the realities of retirement planning and that serve as barriers to individuals creating a good solution in this era of individual responsibility.

Planning for your retirement, it’s never too late

Studies show that some women fear becoming a bag lady in retirement. Most likely it’s because they don’t know their retirement numbers.

Nearly half of women fear becoming a “bag lady” when they get older, despite the fact that 60 percent of them are the primary breadwinner in their household and 54 percent are in charge of the finances at home.

According to the 2013 Women, Money & Power Study from Allianz Life Insurance Co. of North America, 27 percent of women earning more than $200,000 a year shared the same fear.

The study, conducted with more than 2,200 women ages 25 to 75, with a minimum household income of $30,000 a year, revealed this fear extends to all corners of life and affluence and was highest among single respondents at 56 percent, but also a significant concern for 54 percent of divorced women, 47 percent of widows and 43 percent of married women.  Source: 

So do you have this fear, if you have perhaps you should look carefully at how much money you  will actually need to continue your lifestyle in retirement?

Do you know YOUR answers to the four most important retirement planning questions?

1. What rate of return risk do I have to take for my current plant to work?
2. How long will I have to work before I can afford to retire?
3. How much can I afford to spend and not run out?
4. How much do I need to be saving to reach my desired retirement income?

Your financial destiny is in your hands. Whether married or single, it is your responsibility to know your retirement numbers.

It’s a mistake for married women to assume that their husbands have their financial security taken care of. 

Women are much more likely than men to be focused on care giving for family members, including parents, husbands and children. Not surprisingly, then, women are much more concerned than men about the need for long-term care in their later years.  Men don’t view lifelong financial security from a woman’s perspective. They may not realize that statistically a woman will outlive her spouse, which may mean that the family assets get depleted if the husband requires extended medical care before he passes.

I once met with a widow in her sixties who was left with absolutely no savings, no assets and a pile of debt. She had no way to pay her mortgage after her husband died. She had always assumed there was life insurance in place. But discovered that the husband had let it lapse four years prior to his death.

In particular, women also said they don't want to be a burden on their children for long-term care, perhaps because they themselves have experienced the substantial demands of care giving. They also don't want to impact the financial success of their children. Another reason that women express for not turning to their children for long-term care is to maintain their sense of dignity.

Sometimes single women can feel overwhelmed by the fact that their financial security is their sole responsibility. But it does not have to be like that, entirely. Resources on the topics of personal finance and retirement planning for women abound. Read books, go to seminars, talk to financial professionals. But most importantly, listen to your gut and take action. Don’t stick your head in the sand.

All women – whether single or married – would do very well to lean in to their finances. Decide that starting today you will cultivate a stronger relationship with your money.

Similarly, retirement is also the worry that keeps most women up at night. Second only to loss of spouse/significant other, “running out of money in retirement” is a worry that keeps 57 percent of women up at night and is the number one worry for single and divorced women.
So if you want to sleep at night, start to plan for your retirement, it’s never too late  and, the sooner you get started the better

When should women retire?

A story that I found interesting was published in the Global Times and shows some interesting attitudes toward women and working. It made me wonder if this attitude is prevalent in other cultures.

 A recent survey to discover attitudes to the age of retirement for women, discovered that more than 60 percent of the Shanghai residents questioned disapproved of the idea of women retiring at the same age as men to ensure gender equality.

According to the Shanghai Municipal Statistics Bureau, most of the respondents believed it would be too physically strenuous for women to work after 55 and half of the 770 respondents considered 55 the best age for women to retire.

The retirement age in China is 60 for men and 55 or 50 for women, depending on the nature of job. Male workers engaged in heavy or dangerous work can retire at 55 and female at 45.

What do expats think about men and women retiring at the same age? Is the retirement age in China too high or too low? What is the retirement age in their home countries and how is this handled?

Paul Dodson, from the UK, art teacher

"In the UK, my home country, the state pension age is between 61 and 68, depending on when someone was born and if they're male or female. But the retirement age is not the same as state pension age and anyone can carry on working past the state pension age. Most businesses in the UK don't set a compulsory retirement age for their employees and most people can work for as long as they want to. But there are current plans by the government to rise the state pension age to 70 in line with life expectancy. That would mean that the young people who are currently entering the workforce will have to wait until they are 70 before they can retire on a pension. 

The public's opinion on this subject is divided. Some are worried that the new plans mean that the decision whether to work or not will be taken out of their hands. Others feel that they are prepared to work past the pension age anyway to make their lives more comfortable when they retire.

As for China, I believe the retirement age should depend on the gender and on the nature of job. I also believe that people should be able to decide if they want to retire or keep working past their retirement age."

Andrea Arioli, from Italy, sales associate

"At the moment, in Italy, men in private sectors and everyone else serving in the public sector retire at the age of 65. Women in the private sector retire at the age of 60. But, according to new regulations, from 2015, the retirement age will rise by three years, to 68 and 63 years. 

Currently the retirement age is a matter of a heated debate across Europe, because of an aging population and a rising life expectancy.

I feel the retirement age in China will rise as well in the next few years, as life expectancy is also rising and China, like many European countries, also has the problem of an aging population. Also, public health in China is improving, as are its working conditions. As for the recent survey regarding women's retirement age, I agree with its results. Men and women shouldn't retire at the same age, as is the case in most of the European countries."

Aurelie Perrot, from France, marketing manager

"In France, where I come from, the current retirement age is 60, which is one of the lowest in the European Union. It was changed by President Francois Hollande, after he was elected in 2012. The previous retirement age in France was 62. The new reform wasn't particularly welcomed by the public, especially when most of the other European countries have been pushing retirement ages higher and higher.

I think the retirement age in China, comparing to Western countries, is quite low. I believe China should gradually increase the retirement age, at least to 65. As for the debate whether men and women should retire at the same age, I agree with the majority of the survey respondents, but that might also vary depending on the nature of the job."

Women must learn to plan finances for a secure future

The following was written by Jasleen Kohli, who is a s senior vice-president and head of operations at Bajaj Allianz Life Insurance in India and is advice is directed at the Women of India, but can be considered by all.

Have you ever wondered how a simple housewife from any strata of society manages her household in whatever budget she has? Why do banks and microfinance institutions lend money to the woman in the household? Simple: women have proved that they are inherently better money managers on a small scale. Yet many women, including working women, seem comfortable leaving their long-term finances and retirement planning to their fathers or husbands. With Women’s Day still fresh in our minds, it would be worthwhile to take a look at simple measures that women could take to plan their finances for a secure future.

The first and most important step is to understand her financial needs and develop a suitable plan. For this, a good start would be to calculate the inflows and expenditure and the level of savings possible.

As many personal finance managers recommend, she must keep emergency funds in the form of ready cash to the tune of three to four times her monthly salary/ allowance. When this level is achieved, she can then take the next step towards financial planning.

The second step is to identify financial goals for her family. Goals, typically, include retirement savings, higher education of children, provision for her daughter’s/ son’s wedding, old-age care for her parents and in-laws, etc. While these are worthy goals, it is extremely important to correctly estimate the sum needed for their fulfillment with the timeframe in mind. Also, any likely liabilities should be identified and accounted for, as this affects the quantum of investment substantially. For example: repayment of loans.

The next step is to evaluate possible investment options so as to meet liabilities and financial goals. It is imperative that a woman educate herself about money management and investing. Various investment options such as mutual funds, bank fixed deposits, national savings certificates, pension plans, real estate, etc., could be considered. Women usually do not consider insurance, both life and health, as priority. However, with rising medical costs and growing incidence of lifestyle-related illnesses, it makes sense to invest in an insurance plan that covers such contingencies, apart from the usual projected living costs, education expenses and retirement benefits.

Retirement planning has become important in the last two decades. The joint family structure has disintegrated, nuclear families have become a norm and parents cannot realistically expect to be financially dependent on their children in the post-retirement years any more. Hence, it is critical for every woman to plan for retirement, the earlier the better. She wouldn’t want to spend her golden years worrying about meeting even her basic needs.

Of course, at different life stages, it is advisable that a woman reviews her goals, her investments and the adequacy of her insurance cover and jiggles her investments accordingly. It is extremely necessary that her contact details, nomination details, etc., be totally updated at all times. Utmost care should be taken to ensure that all documents should be clear in every respect, especially real estate ownership deeds, so that there is no ambiguity at the stage of realisation of the investments.

In case financial planning seems too overwhelming, it is recommended that she find an experienced financial planner who can help her visualise and plan her long-term financial goals.

In the long run, a woman should not let the fear of losing money or the fear of failure stop her from investing. After all, the financial well-being of her entire family rests in her hands…and she is the best money manager in the household.