There is a lot of talk lately about Pay Equity for women. It’s been 30 years since the government introduced Equal-Pay-for-Equal-work legislation. This year both the Federal and Provincial governments have proposed further legislation to standardize employment income in hopes to improve pay equity for women.
Why is it such a big deal? Full time working women make 30% less money than their male equivalents. As a result, a woman would have to work 14 years longer than a man in the same job to reach the same pay grade. This means that if her male counterpart retired at age 65, she would have to work until age 79 to retire at the same income. Considering most Defined Benefit Pension plans average the last five years of income to determine retirement benefits; this pay inequity doesn’t stop when we quit working.
In addition, women have to face some sobering economic realities when planning their retirement.
Women live on average 3 years longer than men, and those that live to age 65 can anticipate living another 20.8 years. The average age of widowhood for women is 56, while 83% of one-parent families are headed by women.
All that; and to think 9 out of 10 women would rather go bathing suit shopping than meet with a financial planner. In Canada women influence 1.3 trillion of the wealth and what they see as financial success if different than men. A woman considers financial success as:
- Being able to deal with unexpected emergencies,
- Paying bills on time,
- Being debt free,
- Have enough money saved for a comfortable retirement, and
- Being able to afford to purchase whatever they want beyond the basic necessities.
Women Think Different than Men
This is nothing new, but when it comes to investing men and women ask very different questions:
A man wants to know:
- What vehicles can he use to generate the best return on his money so there’ll be enough money to retire when he wants?
- What are the numbers? How much does he need to save, where does he put that money and how much does that money need to grow between now and retirement?
A woman wants to know:
- What happens if the stock market tanks?
- What if she needs to tap into the money in case she loses her job?
- What if she doesn’t save enough by the time she wants to retire?
- What guarantees does the plan come with?
Pay equity it just the beginning of long-term financial security for women and their families. I commend the government for taking additional steps towards ending this discrimination.
Have a great weekend,
Tracey
Sources: BNN interview with Pay Equity Coalition member 03-07-18, TD Asset Management Selling Financial Services to Women by Holly Buchanan, Fidelity Investments, Invested in Women
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