Generally speaking, women face different challenges through their financial life journey, compared to men, including:
The Gender Pay Gap
The gender pay gap - the differential between the average pay of males and females within an organisation - is estimated at an average of 14% in Ireland (Eurostat). This means that the average woman, even those in leadership positions, will be earning less than male counterparts in a similar role.
Maternity Leave and the Need for Flexible Working Conditions
Compared to men, women are more likely to leave the workforce for extended periods of time, or reduce their working hours or stop working completely, particularly those with young children. These gaps can often make it harder for women to progress in their careers as well as leave them with a reduced income.
Longer Life Expectancy
According to the Central Statistics Office, women’s life expectancy at birth is 82.8 years, versus 78.4 years for men (Life tables 2010-2012). Women also often tend to retire earlier than their male counterparts. This, coupled with gaps in employment and the gender pay gap, means it is common for women to enter retirement with less saved than men of a similar age.
A Different Attitude to Risk
While generalising an entire gender’s approach to investment is tricky territory, it is safe to say that a majority of women show preferences that differ from those seen in male investors. Women are more conservative long-term investors than men. Their primary goals revolve around keeping money safe and saving for long term goals, primarily retirement. Risk aversion may be causing many women to miss out on greater long-term returns from their investments.
So, how can women navigate these challenges and secure their financial future?
5 Financial Planning Tips for Women
As more and more people become responsible for their long-term financial wellbeing, working with a financial professional will help them feel better prepared to achieve their financial goals. Women in particular will benefit from financial planning as they navigate the realities of their financial journey, like career breaks, pay gaps and longer lifespans.
A properly defined and documented financial plan will give the greatest chance of a successful outcome. It will not guarantee financial security or wealth but will provide an opportunity to pursue both and requires proper analysis, discipline and expertise.
This International Women’s Day we encourage you to forward this advice to the important women in your life.
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