In previous blogs, I’ve talked about the need to start preparing earlier for retirement. Everyone needs to make sure that they understand what they’ll need to enjoy their golden years and then start to put away the necessary amounts to reach their target.
Of course, that’s not what most people are doing. And it’s something that I’ve suggested that pension providers and retirement systems can help to address, particularly by providing new forms of digital support and tools to give savers a helping hand. So far, so simple. But those points I’ve previously discussed are aimed at everyone.
However, I’ve started to wonder whether there is a need to think about specific groups in different ways. That thought was prompted by the finding I came across that women are not only subject to a gender pay gap when they’re working (earning, on average, 80 percent of what men earn), but they’re also likely to save less than their male counterparts over the course of their careers. In addition, the Accenture Public Service Pulse Survey in the U.S. reveals that 70 percent of men, compared to 52 percent of women, are aware of actions to take to financially improve retirement.
But women live longer than men on average, and therefore need a bigger nest egg to fund more, not fewer, years of retirement. The US census shows, for example, that there are more than 50,000 Americans aged over 100 and the vast majority of them are women. Women are also 80 percent more likely than men to end up in poverty in their old age and tend to rely more on social security as their principal form of income than men do. Overall, by the time they reach their eighties, men’s income advantage compared with women is 44 percent.
Do those kind of numbers mean we need to see gender-specific tools or even tools that include scenarios that give windows of time for men or woman gaps in income, so anyone can do retirement planning for what are likely to be very long periods of retirement—and start to redress the savings gap? I think it’s a question that pensions providers, employers and policymakers will need to explore. I’d be very keen to hear your views.
See this post on LinkedIn: The Gender Pay Gap: Not Just About Salaries, Savings Matter Too.