Retirement risk for women
I don't want to be the only woman in my retirement village who can afford to go on cruises and enjoy shoe sales. Sadly, if statistics about the gender pay gap are to be believed - and they are similar the world over - my choice of shopping buddies might be limited.
We've long known women generally outlive men and that we are generally paid less than men. Better medicine and improved lifestyles are leading to longer lives for all, but women can still expect to live some five to 10 years longer than men.
As for the gap between what women and men are paid for the same job, there has been some progress. But the gap still exists and it makes a huge difference for women, in a bad way.
I was interested to read an article last week entitled "Women in a super crisis" that suggested many Australian women will retire with enough funds to last them just a few weeks into retirement. Given that Australia is lauded for its superannuation system, and that Australian workers contribute 9 per cent of their salary to super compared with our measly 3 per cent, I found it hard to believe that Aussie women would be in a crisis situation.
But, the combination of outliving men, earning less in their working years and poor savings attitudes are leaving women with woefully inadequate retirement savings.
The average superannuation account payout for Australian women is a mere $37,000. That is one-third of the average payout for male workers ($110,000) which itself is insufficient.
So what can be done? There's not much we can do to avoid outliving the men, and I'm not sure we want to.
As an aside, scientists suggest that women live longer than men because we have less testosterone. The scientists did note that men could consider "testosterone reduction therapy" to extend their lives, however they may not feel the longer life was worth living.
Closing the gender pay gap is not straightforward because it is not just about different pay grades for women and men. Yes, the pay differential needs to be sorted, (and is slowly improving) but the problem is compounded because women are more likely to have career interruptions to raise families and women outnumber men when it comes to part-time or casual work.
The financial impact of even a small time out of the workforce, where retirement savings contributions stop, quickly snowballs to become a huge chasm in later life.
Women do have some choices that can close the gap.
We can save more now - we've got to learn to balance everyday living costs with the need to protect ourselves in old age. We can delay our retirement and if we're going to be on our own for years, why not? We can try to find new sources of retirement income or hope to increase the earnings on our retirement assets (though this comes with a higher risk of loss).
Or we can choose to spend less during retirement - there go the cruises and Jimmy Choos (slippers not stilettos).
Carmel Fisher is managing director of Fisher Funds, an investment manager and KiwiSaver provider.
Sunday Star Times