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The Gender Wage Gap and Its Impact on Women’s Retirement

The Gender Wage Gap and Its Impact on Women’s Retirement

Women have a more difficult time getting into financial planning as compared to men. While there may be many causes to this effect, the one that stood out to us was the wage gap between the two genders.

Here’s how income disparity gets in the way of retirement planning for women.

The Glaring Difference in Retirement Funds

According to a report by the National Institute on Retirement Security, women have an average retirement income of $47,244, which is only 83% of what men earn.

The difference may not appear to be much, but it does explain why only 39% of females think they’ll last 25 years into retirement when put in direct conjunction with the 54% of men who feel the same way.

The Downside of Living Longer

Statistically speaking, women live longer than men. If they outlive their husbands, the chances of them making it on their own are slim to nil. 

Cohabitation is less expensive than living alone and is the primary reason many people these days get married in the first place. Post-retirement may therefore be easier said than done in the absence of a male partner.

A Higher Reluctance Towards Investment Planning

You may be wondering what investment has to do with retirement, but isn’t profit the main reason people buy stocks and bonds?

Most people seek the financial security this affords, but women are less likely to shake up their portfolios because they have more to lose by taking risks. Their investments may not do well over time, but they’d be too helpless to do anything about it. Hence, the savings they made might not be there at all by the time they retire.

The Older they Get, the Higher Their Healthcare

While men do come down with a fair share of health-related issues when they age, women are more likely to contract chronic diseases and don’t have a male spouse around to take care of them.

 Therefore, they turn to a flawed healthcare system for their long-term care, which may eat into a massive portion of their savings.

The Injustice in Divorce

When a pair goes through a divorce, it’s the woman who suffers more. During alimony negotiations, they might know they’re entitled to any retirement funds their husband earned during the course of their marriage but might not be aware of the fact that they can claim losses incurred during that term as well.

For instance, the right to reimburse the retirement funds they missed out on due to being out of the workforce due to their marriage.

Make Your Retirement Secure with Financial Planners in Illinois

The good people at our investment management firm understand how women get shortchanged in the days leading up to retirement.

As financial advisors with knowledge of the ins and outs of financial planning and investment management, we’re all too familiar with the phenomenon, just as we’re capable of sorting it out for you.

Get in touch with us to be financially confident well into your retirement.

Content and opinions in this material are for general information only and not intended to provide specific advice or recommendations for any individual.

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