Women In Retirement
By: Priscilla Healy
Priscilla Healy, of Pallett Valo, shares some of her experiences about working women and their retirement. In fact, she finds retirement is less traumatic for women than for their male counterparts.
The Statistics Canada study ʻNew Frontiers of Research on Retirement, ʼ with its heavy focus on women in retirement, stated what we knew already. Women are working longer and have higher pensions than before, and that family dynamics of retirement change with womenʼs increased economic power.
Here are some observations from a perspective of years of experience with business and professional women.
Todayʼs working women are likely to be happier in retirement than previous groups of the same age because they are less vulnerable to the ʻempty nest syndromeʼ or to suffer severe adverse economic impact if their marriages break down.
Also, they have more power within their relationships because theyʼre contributing a substantial amount of the revenue.
Finally, women tend to have relationships and activities that make easing into retirement less traumatic than for their male counterparts.
The end of mandatory retirement will be a boon for women.
Women in the managerial and professional workforce do not necessarily want to retire.
Women who are over 50 today are healthier and more conscious of fitness and nutrition, than pre-boomer 50-year-olds. In the workforce, older women are competing with younger high-energy women. It takes money to keep fit and healthy and attractively groomed. Managerial and professional women have money and are increasingly willing to spend the time.
Women with interesting jobs do not necessarily want to retire. Once someone has experienced the stimulus and the ego satisfaction of the workforce, it may be difficult to let it go.
Women may be motivated to work after normal retirement because during their working lives they will still have earned less than men (even in comparable jobs), and will have had periods of absence for child bearing and child rearing, or (increasingly) eldercare.
Women with economic power have more control over their lives. However, not all women will want to keep working. Since women tend to be younger than their spouses, some may choose an earlier joint retirement. Also, those with higher family incomes and savings may be able to take early retirement. Finally, women tend to have lives beyond or outside their work, which can make retirement more appealing.
However, there are still serious concerns.
There may not be enough money for retirement without a severe curtailment of lifestyle. Both women and menʼs life expectancies are increasing. With many years after retirement for which provision must be made, many are not starting to save early enough. Women may, and often do, place children and family concerns ahead of personal savings. They may be tempted not to keep savings in their pension plans. It is possible to partially collapse even locked-in employer-sponsored pensions in a number of jurisdictions.
Additional concerns include:
- Women need, but are probably not getting, sound financial planning and investment advice, both before and after retirement. Generally women invest too conservatively. Investment objectives should be set in the light of a lifetime time horizon;
- Women need to understand family finances. Greater participation in the workforce and contributions to family income help in this regard;
- Women need to understand the financial consequences of separation and divorce. For example, it is not well understood that the mere fact of separation before the spouse retires in most Canadian jurisdictions disentitles a woman to survivor benefits from her spouseʼs workplace pension plan.
Workplace pension plans cover a distressingly small percentage of working women. Also, women are disproportionately found in casual or part-time work where there are no employer pension plans.
The current concerns expressed as to the security of employer sponsored pensions (which are highly regulated) and for the Canada Pension Plan (which is managed by a well-qualified independent board) should be far less than the concern that many women have no workplace pensions at all, insufficient RRSP or personal savings, and insufficient appreciation of how to invest for the long-term.
Priscilla Healy is with Pallett Valo.
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