When you think of retirement from a woman’s point of view, you see an array of challenges.

Writing in the National Post Christine Ibbotson observes that women “tend to live longer than men, and many divorced women or widows are simply choosing to remain single in retirement.”

This creates a “unique challenge” for them, she continues. “Many retired women receive much less than their male counterparts. Often, women have not worked the same amount of years as men, or have earned less income during their working careers, and therefore do not receive the same pension benefits.”

As well, Ibbotson continues, women may tend to be more “risk averse” with investing. Recent research from BMO found that “men were more likely to hold stocks and mutual funds in their investments whereas women were more likely to hold guaranteed investment certificates (GICs).”

An infographic from Eckler Partners provides more details on these factors.

In 2017, a woman could expect to live to age 83 on average — for men, the number is 79, the article notes. Sixty-two per cent of women were likely to take a break from work to care for their kids, compared to only 22 per cent of men, the Eckler research continues.

Scariest of all — 51 per cent of Canadian woman “haven’t even started to save for retirement or know how much they plan to save,” the article notes. A whopping 92 per cent of women surveyed say they have “minimal or no knowledge of investment.”

So, to sum it up, women — who live the longest — earn, on average, just 69 cents for every dollar men earn in Canada, Eckler reports. That means they have less money to save for a retirement that is almost bound to last longer than a man’s.

An article from the Wealthtender blog expands on the idea about women earning less than men, and its impact on retirement saving.

The article cites Merrill Lynch research in the U.S. as noting that “when a woman reaches retirement age, she may have earned a cumulative $1.05 million less than a man who has stayed continuously in the workforce.”

This necessarily means there is substantially less money to save for retirement by women, the article adds.

An article from Kiplinger suggests that women take a good look at annuities when they retire.

Noting that women earn less, and thus get lower government retirement benefits, the article underlines the idea that “women live longer, so their savings have to last longer.”

While the article is written for a U.S. audience, it makes the point that through an annuity, savings can be turned into “a guaranteed stream of lifetime income, paid monthly, no matter how long that is… in other words, a woman can use it to create a private pension.”

The article quotes University of Pennsylvania economist David Babbel as recommending that lifetime annuities should “comprise 40 to 80 per cent of their retirement assets.”

What can women do to close the retirement savings gap — apart from considering annuities?

Ibbotson recommends they “start by educating” themselves… “when we know more, we make better decisions and feel more empowered to improve our situation.”

“Start to know what your financial picture looks like. Buy a notebook and create a budget — your new financial plan,” she writes. Financial advisers and accountants are recommended, she writes, and your retirement savings portfolio needs to be designed “to grow with products that that offset inflation and taxes.”

The Wealthtender article adds a couple of other good points.

Focus on increasing financial literacy, the article suggests, by reading financial blogs, listening to related podcasts, and watching online videos on the topic of personal finance.

As well, the article concludes, women should focus on the future.

“Acknowledge early on that you may spend a big part of your life on your own, so always make saving one of your biggest priorities. Even if it’s just saving an extra $50 extra per month or increasing… your contribution by one to two per cent, the money can really add up over time.”

If you have a pension plan at work, be sure to join up, and participate to the max. Many plans will allow you to do “buybacks,” and make contributions after you are back at work for periods when you were away. This can really help fatten up your future pension cheque.

If you don’t have a pension plan at work, a great program to know about is the Saskatchewan Pension Plan. It’s open to any Canadian with registered retirement savings plan (RRSP) room. Your contributions are invested in a pooled fund, featuring low-cost expert management. When it’s time to retire, SPP will help you turn your savings into retirement income, including the possibility of a lifetime annuity.

And now, there are no limits from SPP on how much you can contribute each year, or transfer in from an RRSP. You can contribute any amount (up to your available RRSP room) and transfer in any amount from your RRSP. The possibilities are limitless!

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