Reasons why it’s harder for women to retire financially free


Although feminism It got us a little closer to equality, the truth is that we still have a very long way to go. Women continue to suffer from many “gaps” in relation to men, whether in the workplace, in society or in our own homes.

In relation to money, things are not much different. It is more difficult for women to invest and we are more cautious, while we suffer from certain inequalities at work that lead us to have much less savings in retirement. And there’s the difference between retiring comfortably or with financial hardship.

“Aspects such as family, education, gender differences and the choices women make throughout their lives They are essential for them to have a good pension,” explains Sonsoles Santamaría, General Commercial Director of Tressis.

Therefore, in his opinion, a comfortable or uncomfortable retirement depends primarily on three factors:

  1. pay: “The amount of the future public pension will depend on the amount of our salaries.”
  2. Saving capacity: “With it, we’ll be able to build retirement assets.”
  3. Planning investment over the years: “Good financial-fiscal planning will help us make the right investment decisions to achieve a comfortable retirement.”

The main challenges

And women have to face many challenges in different areas of life that men do not. One of the main ones is the gender pay gap, which, according to Santamaríi, “directly affects the income available for savings and retirement investments.”

Moreover, it is often experienced by many women interrupting their careers, whereas we are always more likely to reduce our working hours in order to attend to care, whether for children or other family members. “These interruptions have an impact on their income and the accumulation of pension benefits,” such as the public pension, according to the Tressis directive.

We must also take into account that women have average life expectancy higher than that of men. Something that seems positive, but it also means that retirement will be longer and therefore we would need more savings to live it comfortably.

Another holdover, according to Santamaria, is that women have a more conservative risk profile than men, which means we’re always more cautious when it comes to investing. This leads us to lower returns compared to men who tend to take more risks. And it is already known that the greater the risk, the greater the return on investment.

According to Santamaría, “gender-based discrimination in the workplace can affect opportunities for promotion or access to higher-paying jobs, which has an impact on income over the course of a career.

Discrimination based on gender can affect opportunities for promotion or access to better jobs

And let’s not forget cultural and social expectations about gender roles, which “can influence women’s decisions about work and retirement, sometimes leading them to make decisions that may not be financially optimal.”

Impact of wage differentials

No matter how many steps have been taken, the truth is that the gender pay gap remains a reality and is one of the variables that most affects women’s retirement. According to the UGT report, women in the European Union earn on average 13% less per hour than men, which is equivalent to a month and a half’s salary (47 days). In Spain, this difference is 9.4%, i.e. 34 days less work per year.

In terms of salaries, the latest data available from the National Statistics Office (INE) show that in 2021, the average earnings of men was 28,389 euros, while for women only 23,176 euros. This means that The average annual salary of women corresponds to 81.6% of the salary of men.

On the same date, 25% of women had an annual salary below or equal to the interprofessional minimum wage (SMI), compared to 10.7% of men. i.e, There are more than twice as many women receiving SMI as men in the same situation.

The consequences of these pension differences are several. First, the most obvious is that women have a lower income on average, so we have a lower capacity to save and therefore save money and invest it for retirement.

This circumstance inevitably means that women have fewer social security benefits, such as unemployment benefits, because they are calculated “on the basis of income during working life,” according to Santamaria.

What to do to prevent this?

To prevent this system from being maintained in the future, work needs to be done on several fronts, as the Tressis Directive explains. On first place, promote equal pay, as well as support family care support plans and promote career opportunities that promote access to positions of greater responsibility.

“There are several angles from which we can work to contribute to equality, and one angle that would particularly help women throughout their lives is financial education and planning their investments,” explains Santamaría.

It is important for women to have a higher income, yes, but when it comes to retirement It is essential that we have tools to help us organize and manage our savings which we have accumulated over the years. Financial education is key at all stages of life, but especially during retirement so that you can do so without financial worries.

“Financial planning provides the tools to modulate the level of perceived risk, manage liquidity events when they occur or are needed and, above all, provides peace of mind by knowing and controlling your financial situation,” adds Santamaría.

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