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The five unique challenges women face in saving for retirement and what they can do about it

International Women’s Day was a wonderful opportunity for us to celebrate women at our Tea Party fundraising event for COPE Galway in Barna, especially given the Hennelly Finance team is so passionate about supporting women to achieve their financial and lifestyle goals.

However, women face a series of different challenges throughout their lives that have the potential to impact on their financial and lifestyle goals, and especially how they live in retirement.

The gender pay gap, taking career breaks for maternity and family leave, caring for an elderly relative, a longer life expectancy, and being cautious with risk, are widely accepted as being responsible for women having less at retirement age than men.

For example, a recent analysis of the gender pay gap in Ireland conducted by PWC revealed a mean gender pay gap across Irish organisations of 12.6%.

The widest gender pay gaps are in the finance, banking, insurance, legal and construction sectors, while the lowest pay gaps were revealed to be in retail, health and charity organisations.

In the insurance sector, it was estimated the mean hourly pay gap is 21.1% which is nearly twice the national average.

The income disparity generally means women have less disposable income they can choose to save and invest for the future.

This is further complicated by another key financial challenge for women – maternity and carer’s leave, and the need for flexible working conditions.

Any break or reduction in income can have long-term effects on women’s financial health. In some circumstances, it may affect their ability to contribute to a pension scheme, or delay promotions and other career opportunities that would normally boost income.

Longer life expectancy is another financial challenge that women face. The average woman in Ireland can expect to live until 84.1 years of age, while men’s life expectancy is 80.4 years on average.

Healthy ageing goes hand-in-hand with financial wellness. With longevity on their side, women need to think about the type of lifestyle they want as they age, alongside the types of resources they will need access to, such as health care and long-term care.

Another key financial challenge that many women face is being less comfortable with risk than their male counterparts.

A lower risk tolerance may impact a woman’s ability to fully leverage her savings and investments, opting for safer schemes that consequently offer lower growth. While this may feel like the safe option, it can in fact be detrimental in the long term, especially where inflation can erode the value of any capital.  

So, how can women make sure they have the lifestyle they want, even though they face a series of challenges that mean they may have less income to do it with than men?

Hennelly Finance director Ruth Hennelly says the key is a strong financial plan developed by a financial planner who understands the challenges women face.

“When it comes to financial planning, women’s needs, goals and communication styles often differ to men, so it makes sense that in some cases, women may prefer a female financial advisor to help them identify a strategy to build their long-term wealth,” Ruth says.

“We understand the pressures on women to juggle a family, a career, and potentially caring for an aging relative; thinking about your own future and how to plan retirement with stretched financial resources can feel utterly overwhelming.”

Ruth says that’s why a financial plan is so important, because it can alleviate the stress women feel about planning for their future with proven financial strategies that are practical and easy to follow.

While a financial plan looks closely at building a nest egg for retirement, it also considers short- and medium-term financial wellness, with protection strategies that provide cover in the event of a job loss or serious medical diagnosis, savings plans for children’s college funds, and health insurance which can prove invaluable by cutting the time spent on waiting lists and providing free access to online GPs.

International Women’s Day might only come once a year, but Hennelly Finance is ready 365 days to support you to achieve your financial goals.

To speak to a financial advisor who can take the stress out of planning for the future, get in touch with a member of our team on 091 586 500 or at [email protected].

 

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Barna, Co. Galway.
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Hennelly Financial Services Ltd. t/a Hennelly Finance & Health Insurance Shop is regulated by the Central Bank of Ireland. Directors R. Hennelly. Registered in Ireland, Company Reg No: 327276.
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