The gender wealth gap and retirement - is an unequal future our only option?

KLIK HIER VOOR DE NEDERLANDSE VERSIE

Gender inequality topics such as the pay gap, gender stereotyping, and being the 'boss of own belly' are becoming increasingly prevalent. But in all these global discussions, one aspect remains secondary: the gender wealth gap in pensions. In the busyness of everyday life, we mainly focus on getting through the day unscathed. If we have a moment, we glance at tomorrow. But the golden years? Those seem endlessly distant. As a working man, there is still a reasonable future ahead of you even without thorough preparation, but what is this like for women? Let's dive in!

A significant disparity in pension benefits between genders

Preparing for that proverbial old age looks different for everyone. And I am not just talking about whether you choose a corporate career, a lifetime of study and PhDs, the entrepreneurial lifestyle, full-time motherhood, or a different way of shaping your everyday life. In particular, I am talking about whether you are male or female. That's right, this is a gender issue. According to the OECD, on average, women have 30% less pension than men, but in the Netherlands, Germany, and Luxembourg, this rises to more than 40%! This significant difference has several causes, which we will examine closely.

4 retirement Curveballs women have to deal with

The pay gap during working life

We kick off with the most well-known cause: the pay gap. It is a well-documented phenomenon but still an unfair struggle for women worldwide. According to the European Commission, in EU member states, men, on average, earn 13% more than women. At the same time, in the Netherlands (where I am based), this gap even rises to 14.2%! Lower-income during your younger years logically results in lower pension contributions, making your pension significantly smaller than that of male colleagues.

Part-time Princesses or victims of the system?

My current living location has become an ingrained theme in this piece, but in the Netherlands, women tend to be more educated than men, yet they work part-time en masse. The system must be totally overthrown to offer women more livelihood security. In the book 'Why Swedish women don't work for free,' Charlotte Bostr?m flawlessly explains why women in the Netherlands are vulnerable. The laws, regulations, and tax system do not give families much choice, so men are given limited parental leave, and women often take on childcare and informal care tasks. This translates into shorter working weeks or career breaks for women, resulting in significantly less pension accrual.

Women outlive men

If you think that earning less and being the dupe of the system is enough, you are pretty wrong. Women also live longer, on average, six to eight years longer than men, according to the WHO, which means we have to spread our pension accrual over a more extended period. Unsurprisingly, this leads to financial shortfalls as the end of life approaches.

Financial literacy is key

Financial education makes all the difference. But when in school, do we learn how to earn extra money? Or what we should do with our money? That buying a house is not always the wisest option? And do we also learn how to invest? Big fat no. CNBC rightly called it, "Women are likely to face financial curveballs in retirement - including one potentially life-destroying event." And those curveballs are abundantly clear: women earn less, work less and for less time, and on top of that, they are twice as likely to outlive their male partner as vice versa. Apart from a vital piece of system optimization, there is a crucial solution: learning to manage your money wisely.?

Women simply don't have enough money and possibilities

Perhaps by now - like me - you have already ignited in anger, but I'm going to add to it. If all goes well, this won't be a curveball for you by now, but women save 30% less than men in their lifetime. And this is not a matter of making good or bad choices but simply the lack of sufficient financial resources. Some 57% of women state that they do not have enough monthly money to set aside or invest more. If there is the occasional windfall, women are more likely to pay off debts, pay off their mortgage, or keep it as cash.

But how is it that we manage to survive into old age? Well, for one thing, women are just super badass. For that, the lack of sufficient financial resources means we must compromise on our living standards. Many compromises are made regarding housing, leisure activities, and healthcare. As in the famous tropical years and the workplace, we make some concessions ourselves. As a result, we depend on informal carers, external help, or government support, depriving us of our autonomy.?

So what can you do??

I'm glad you asked. Start by learning strategies. Explore, read books, and learn from others. Engage with other women and make sure you expand your financial knowledge. As I always say nice and cheesy to my 10-year-old son, teamwork makes the dream work :-) And now for a fundamental lesson. Whether married, living together, or otherwise dependent on a man, ensure you stand on your own two feet. Get a job, start a business, and arrange it so you can care for yourself (and any children) anytime, anywhere. No excuses. Because otherwise, that unequal future is the only thing you can fall back on.