Building wealth and eventually being able to comfortably retire are a constant goal for most people. When it comes what is needed to get to this goal, there are factors women need to consider additionally than men.
Economic inequality by gender
Per Out World in Data, the research shows gender pay is still existing despite of the awareness and actions taken so far. When it comes to lifetime economic, the inequality does not stay at pay only. There are other areas that show gap by gender and poses extra challenge for women.
All over the world men tend to earn more than women. This the most known “gender pay inequality”. Over time, this gap is decreasing thanks for increasing awareness and many workplace active method applied. Below data show that the United states pay gap has decreased to below 20%, however, it has not been improved much since 2000. Another factor we should particularly keep in mind is that, the gender pay gap is particularly bigger for older women. Analysis shows that the gender pay gap tends to increase when women marry and when/if they have children.
Glass ceiling in workplaces. Women are still often underrepresented in senior positions. Only 18.56% firms surveyed in 2017 are having women as highest ranking managers. At the same time, in low paying jobs, women are often over-presented. 95% of childcare workers are women, 89% of health care aids are women and 88% of maids and housekeepers are women. Those low paying jobs make it particularly difficult for women to build enough wealth to retire.
Women tend to default financial decisions in household including their own personal incomes to their partners or other professionals. Women are mathematically equally intelligent as men, but when it comes to financial decisions, women are less inclined to be in charge. in the case of poor financial management from their partners or divorce, women often felt less certain on their own judgement and actions.
Women live longer.
Women averagely live 5 years longer. This requires women to plan more wealth than men. This not only adds to the regular expense required for extra living time, it also means higher health care expense as women aging longer. In general, women should prepare for 20% higher wealth for their retirements.
Health care costs are higher for women
When it comes to health insurance, women are considered a higher risk than men because they tend to visit the doctor more frequently, live longer, and have babies. In 2016, The department of Health and Human Services (HHS) issued rule ending discrimination in healthcare and health insurance. This is to strengthen the policy in Affordable Care Act (ACA).
Research shows that women could be charged 50 to 80 percent higher than men. Women also sometimes have been less insured than men because their incomes tend to be less.
Even with HHS and ACA anti-discrimination rules, there are continous cases around women paying higher premiums comparing to men. One in four women reported putting off care for financial reasons, compared with one in five men.
Additional health care costs need to be factored into women’s wealth building.
When building wealth, there is hardly one rule fits all. However, there are known factors that women should consider to sufficiently prepare for retirement. In addition to gender, everyone has different health, education, income, family, retirement age dynamics. Make sure your plan consider your own individual situations. A simple rule of thumb is to be able to afford at least 80 percent of your current living expense as your monthly spend.
Simple Wealth For Women is a blogging website focusing on financial discussions. I help women to crush debt, learn how to invest and make more money. I show you simple approach and provide you with specific ideas to help you get to financial freedom and build an amazing life.
Sharing is caring. Please share this post if you find it helpful.