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Gender gap in pensions is real and needs to be fixed

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Payouts for women are lower than those of men.

As it turns out, the world’s women only make 77 cents per dollar that men earn. A lesser-known fact, partly due to that pay gap is the difference in pensions between men and women.

Gender gap in pensions is an issue that needs to be addressed. The “Mercer CFA Institute Global Pension Index Report”, which was released this year, examined the gender gap in pensions across all retirement systems surveyed. In terms of gender gaps between males and females in retirement benefits, it is close to 30 percent. The gap can be defined as the difference in the average male pension and average female pension expressed as a percentage.

This gap is approximately 34% in the U.S.

This disparity is caused worldwide by system design, job-related factors, and socio-cultural considerations. But one thing stands out: The retirement income of women is not as easy as it should be and the situation presents significant challenges for them.

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What is the reason? This is the reason: The system benefits from less money.

A woman’s career path is less straight-forward than a man. Part-time work is possible for women at one point. They might have shorter career paths due to the care of their children and elderly.

It can also impact their retirement eligibility and credit. They may also be affected by socio-cultural and financial issues, such as inability to afford child care or divorce effects.

The countries that were evaluated show great differences.

In Japan – which had the largest gap in the survey at 47% – the historical gap between the genders remains a major factor; the overall lower employment rate of women also plays a part. Canada’s gap is lower than average at 24%. It’s due to the policy in which women are eligible for pension credits as primary caregivers of children younger than 7.

No matter what the reason may be, the gender gap in pensions presents serious challenges. With women retiring with lower benefits and facing financial hardships, it is a problem that will not go away. The problem gets worse as women age faster than men.

It is possible to do something about it. The continued narrowing of the gender pay gap – which has indeed been improving over time – will help.

Employers can create more flexible work environments and encourage women to remain employed. It has been proven that there are other ways to work.

The burden of primary caregivers, women, will be lessened if fathers and mothers take parental leave. Women will be empowered if there is more equality at all levels within an organization.

Social security or other traditional workplace programs should not penalize women who leave the workforce to take care of their young children or elderly relatives. Private investments must be encouraged in financial literacy systems that incorporate them.

According to studies, women tend to invest more conservatively than men. An investment strategy that is conservative can make a big difference in long-term returns.

The government can help by making it easier to access affordable childcare, which is a major reason why many women are leaving the workforce. Women should be able to continue receiving benefits from their plans even when they are on leave. If there are divorce proceedings, it is important to consider pension rights.

What does this mean for retirement planning and savings? Simply put, lower salaries equal lower retirement savings and pension contributions.

While the gender gap in pension benefits is not as prominent as the gap in pay, it’s still a pressing issue. This issue must be addressed before women in retirement face even greater poverty.

 

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