Bridging the gender financial gap

0 Flares Facebook 0 Google+ 0 LinkedIn 0 Pin It Share 0 Twitter 0 0 Flares ×

Bridging the gender financial gap

When Aretha Franklin and Annie Lennox belted out the hit song, “Sisters are doing it for themselves”, it was a bold declaration of how far women had come in society, in terms of taking the initiative and fighting for equality.

Thirty years on, however, there are still many areas where women struggle for equality. Financial self-determination is perhaps one of the most significant areas where progress needs to be made.

The gender pay gap

The matter that perhaps gains the most attention in public discussion is the limitations in employment opportunity and the general discrepancy in incomes between men and women. While there has been progress in many career areas and women now appear in many leadership roles in business, public service, media and sport, the gap still exists.

To quantify the extent of the problem, we can look at a recent report that points out a 16.2% gap in incomes*. This figure has been stubbornly static over the last 20 years or so, indicating a need for more to be done to bridge the divide. Causal factors could be such things as lower paid job types being dominated by women, a lack of acceptance of women in certain career areas and a predominance of women leaving work to raise children.

Whatever the reason, however, we know that this phenomenon restricts women building their own financial independence.

Family ties

Taking time off to care for children is still a role where women largely bear the burden. This naturally means that there is a greater dependence on their partners for financial support and less funding being dedicated to things that build financial independence, such as super and other wealth creation plans.

An interrupted career path and an ongoing need to care for children also makes it more likely that women will seek part time employment, which further limits financial development.

A longer retirement to be funded

One area where women continue to outdo men is in the longevity stakes. Once a male reaches age 65 their life expectancy is an average of 19.5 years. Women on average will exceed this average by nearly three years**. This positive is a double edged sword, given that women may need to fund a longer retirement.

Playing catch-up on super

The Association of Superannuation Funds of Australia have uncovered some sobering statistics on just how far behind most women are when it comes to super accumulation. Their research shows that women between ages 50 to 54 have an average of $84,228 built up in super, while men enjoy a much healthier $146,608. This gap widens in the 55 to 59 age range with $115,046 for women compared to $227,765 for men. It widens again in the 60 to 64 bracket with $138,154 vs $292,510***.

Such a profound shortfall cannot be remedied overnight, but it underscores the need for women to take a proactive role in gradually building their own super resources to create a platform for financial independence in the future.

A financial plan for freedom

Other areas of financial development, such as protecting income and livelihood with adequate insurance, budgeting, investments and an overall financial plan, are all critical to further strengthening this platform. Sisters certainly do need to ‘do it for themselves’ by taking the initiative, educating themselves and forging their own financial path in life.

Your adviser can be a key ally in helping you get there, so take advantage of their expertise in planning your future.

* Workplace Gender Equality Agency: Gender pay gap statistics August 2016

** Australian Bureau of Statistics: Life tables, States, Territories and Australia – 2013-2015

*** The Association of Superannuation Funds of Australia Limited: Superannuation account balances by age and gender December 2015

0 Flares Facebook 0 Google+ 0 LinkedIn 0 Pin It Share 0 Twitter 0 0 Flares ×

No comments yet.

Leave a Reply