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Why do women need to put away more for retirement – an insight

Sep 09, 2019 | 10 months ago | Read Time: 3 minutes | By iKnowledge Team
Why do women need to put away more for retirement

However young you may be, if you’re a woman, it is never too early to begin investing. In fact, thinking about your retirement may not be a bad thing, either, even if you’re just in your 20s or 30s. Barring certain exceptions, it is pretty much understood that women draw lower salaries than men do, and they invariably outlive their male counterparts as well. Effectively, this means that it is likely that a woman would have a longer retirement period, and possibly lower finances than a man would, to see her comfortably through her golden years. Reason enough to start building a retirement corpus early on, wouldn’t you agree?

Statistics reveal that there was a 39 percent increase in the number of single women between 2001 and 2011 in India. Census 2011 states that there were about 74 million single women in the country, whether unmarried, separated, divorced or widowed. While these numbers themselves tell a cautionary tale, there is also the possibility of income loss for a spouse, even in case the woman is married. Add to this, is the gender pay gap, which states that women in India earn 20 percent less than men do, as per the Monster Salary Index (MSI). All these make it reason enough for a woman to ensure that her saving for retirement is likely, more than her male counterpart would put together for himself.

While women are making their mark on the work front, it is also true that women may just have a shorter career than men, for reasons ranging from marriage to childbirth. Further, if the spouse relocates to another country, it may mean lack of a work opportunity for the woman. Research indicates that women take about 7 years off from work, which means that should they come back to the workforce, they automatically start at lower salaries and are subsequently eligible for lower retirement benefits.

Further, if feasible, women should continue working as close to retirement as possible, if not during retirement itself. Not only does this keep a person mentally active and physically fit, but it allows for a longer time frame in which they can earn and save. Planning for retirement during their working years ensures a smooth transition between work life and the later years.

This article provides sound information as to why women fall short of a retirement corpus. It is wise to be better prepared and plan ahead of time. Here’s what women should do, then, to ensure that they save enough for retirement and can lead a stress-free financial future. For starters, they need to save at least twice as much as men. Given that women also contribute to the family, it may not be easy to put aside as much money as they would like, especially in the earlier life stages when providing for the family is high on their list of priorities. It is always a good idea to explore the various investment options available today and select the ones that best meet your requirement. For instance, when you consider long-term planning, a viable option could be one with a lock-in period, so that money is readily available at the time you require it. For more liquidity, you could consider flexible options that allow you to withdraw funds should the need arise. Essentially, investing smart is what will make the difference between getting mediocre returns for your investment versus a significant corpus.

When it comes to saving, women need to seek education about the investment choices available. Take an active part in securing your finances. This makes it the best time to consider retirement planning, and make sure that you are not at risk of being in a financial bind in your later years. When planning for a comfortable retirement, the bottom line is that saving early could give a woman the opportunity to build a substantial corpus and overcome any financial challenges that may arise.

Plan prudently for the future, starting today! To know about Aegon Life’s life insurance products like term insurance and other products, visit our home page.


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