Research shows there’s a growing number of women heading into retirement in bad financial shape.
Verity Byth, a researcher, strategist and women’s finance advocate, urges women to take more control of their financial wellbeing.
“A growing proportion of women face retirement in poverty and women are the fastest growing group of homeless people,” she warns.
According to statistics from the Workplace Gender Equality Agency the homeless rates of women over 55 grew by 30 per cent between 2011 and 2016. Verity expects that figure to be considerably higher when the next set of figures are released, due to the disproportionate effects of the pandemic on female employment.
Women have substantially less superannuation than their male counterparts which is a major issue considering that, on average, women live longer than men.
“On average, Australian women retire earlier than men. The average age for a male to leave the workforce is 60 whereas it is age 52 for women. With the average female lifespan being 85 years, that’s more than 30 years that you need to have funds to live on. And, even if you work until 65, that is still 20 years of no wage income.”
And if that is not enough of a wake-up call, Verity says one third of women have no personal savings when they retire. And, for those that do retire with some personal savings, they usually have 30 per cent less than their male counterparts.
This early retirement-less-savings scenario is something Verity says is a feature of the economic system we live in.
“More women work in jobs that pay less and the gender pay gap, combined with a raft of other factors means that, at the current rate, it will take several decades for women to reach income equality.
“Older women are also more likely to leave employment to care for an elderly or ill person. This, of course, is unpaid work. These women may also have been previously out of the workforce in their younger years raising children.”
To combat all this doom and gloom, Verity recommends taking a good hard look at your financial situation – sooner rather than later.
“Regardless of your age, whether you’re married or unpartnered, you should consider how you want your retirement years to look. Understanding what retirement means to you is important as it’s an old fashioned word and many women can and want to continue working past age 60.
“Ask yourself ‘what will my financial situation look like if I have to fund myself for the next 20 years?’ and ‘how much does it cost to be me?’. You can hope you will be financially okay but hope is not a plan.”
While many may think they need to rush out and see a financial advisor, Verity believes there are only two reasons for seeing a financial planner; either you are in financial trouble or you’ve done all the work, and just want technical financial answers to technical questions.
“Work your way through the Barefoot Investor book and collect all your information before seeing a financial planner – but not before. You shouldn’t delegate your retirement visions to someone else, as only you know what you want and what’s important to you. Look at your assets, debts, future costs and consider your real estate options.
“Maybe you’ll need to move to a smaller property or to another suburb to free up some capital that you can live on.”
Better still, Verity suggests going on a ‘date night’ with your financial future. Grab your partner or a trusted friend and pour over your options while you pour yourself a wine.