It’s no secret that most of us consider retirement an important priority. Whenever work gets particularly tiring, many of us think about retiring comfortably as a way to tide us over.
Although, when it comes to retirement preparedness, some groups fair worse than others. As it turns out, women business leaders are less prepared to deal with retirement than male business leaders. People Matters reports that 2019 saw the highest rates of women in senior management all across the globe, which presents the perfect opportunity to address the retirement gap among women business leaders.
Understanding the retirement gap
Why are women business leaders less prepared for retirement? To start with, it seems as though women have a different mindset when it comes to saving. A 2019 study from Leading Retirement Solutions found that women business leaders tend to save their money elsewhere, choosing instead to support dependents or re-funnel funds back into the business. They also found that only 82 percent of women business leaders said that they started contributing to their savings plan before the age of 40 compared to 91 percent of male business leaders.
There are also lots of little barriers that, when added up, leave thoughts of retirement on the backburner. Listen Money Matters reports that the pink tax alone costs women up to $1000 per year, an enormous amount considering much of this is spent on necessary hygiene products.
Why the retirement gap needs to be closed
One of the most important reasons for closing the retirement gap is biological: women, on average, tend to live longer than men. The retirement gap grows each year, thus adding onto the other wage gaps that women have to deal with. As these gaps accumulate, contributing to your retirement down the line may not be enough.
Closing the retirement gap helps women leaders focus fully on the present, thereby allowing them to empower other leaders in their community. When women business leaders aren’t burdened with thoughts of retirement savings, it can only lead to productivity gains and improved morale overall.
It’s also important to remember that it’s not just women business leaders who are left behind by the retirement gap. Female employees may have an even harder time trying to close the gap, as they don’t have the same financial opportunities granted to women in senior management positions. Since the retirement gap cuts across the ranks, addressing it provides a great opportunity for leaders to mentor and empower the female employees on their team. After all, these employees might become the next global leaders as well!
How to close the retirement gap
The first step to closing the retirement gap is addressing the pay gap itself. The retirement gap is based off of the pay gap, so ensuring equal pay for all employees helps even out the playing field when it comes to saving for retirement.
Offering financial literacy programs is the next best step. Hiring financial advisors and professionals as part of your wellness program can provide a world of good for your female employees, as Maryville University notes that financial advisors are equipped with the right expertise on investment advising, insurance, portfolio management, and banking — all areas that your team can do well to learn about. Women business leaders and female employees will then have a clearer idea on how to map their financial future while knowing they have the support of their company behind them.
Our previous article on Millennials and the Road to Retirement Independence highlights the huge role that employers have in instilling the importance of retirement. This awareness is especially important for women, whether millennials or not, as they need to see retirement as a way to take control of their financial future.
At LRS, we’re committed to closing the retirement gap by empowering women leaders to make sound financial choices. Influencing women leaders can help them be champions for those in their community, which is a step forward in finally closing the retirement gap for good.
Written exclusively for leadingretirement.com by Kristen King
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