“…I think I will need to work until I’m 120 to be a comfortable and self-funded retiree…”
“…I expect to be poor. I may become functionally homeless…”
“… I am stuffed if my partner decides to leave me …”
These are all statements Australian women made when addressing their future retirement prospects during a 2017 study. It’s a stark contrast to the traditional view of retirement as a time to rest and relax, but it’s the bleak reality that many women face today.
This has left employers wondering “how can I help my female employees get back on track for retirement?”
Financial literacy
There’s no denying that when it comes to budgeting, women know what’s what. In fact, a staggering 91% of Australian women are confident when it comes to their ability to create a budget. Similarly, 88% of women say that they have the ability to save for short-term goals. With figures like these, it would seem that women are in a great position.
Unfortunately, financial literacy drops dramatically among women when it comes to investing and planning for retirement. Only 65% of women feel that they know how to invest – with even less (31%) holding shares outside of their superannuation fund.
Women are worried about their financial wellness and are looking for a solution. 9 in 10 women believe that employer funded superannuation will not meet their retirement needs. 40% are stressed that they won’t have enough money set aside for retirement, but feel they’re unable to improve their situation.
Starting a family
A major reason why women fall behind financially is that they often have to take time off for family reasons, the most common being maternity leave. Being out of the workplace halts any future wage growth until they return, resulting in what’s referred to as a “wage penalty”. This penalty is the difference between what an individual could have potentially earned had they not taken time off, compared to their actual earnings after taking a returning from a break.
Australian studies show that women who return to work within 12 months of taking maternity leave suffer a wage penalty of around 7%, which increases to almost 12% the following year. Whilst this wage disparity eventually lessens over time, it continues to exist for 10 years after childbirth – or even longer if a woman chooses to have more children.
Because maternity leave causes such a significant impact on future wage growth, it ultimately affects the amount women have set aside in superannuation.
To put things into perspective, women who retired in 2016 had $120,000 less super than their male counterparts.
This means that an understanding of money and a strong financial plan are essential to women who want to achieve financial wellbeing.
Women don't feel like they can ask their employer for help
A common sentiment held by women with low financial wellness is that they feel unable to get help, simply because they’re afraid that they’ll be treated differently or be seen as incompetent by their employer.
To combat this, a mistake many workplaces make is to hold a generic financial education presentation, leaving many to feel like their employer doesn’t understand or care about their needs. This makes sense when you realise that these presentations are made to be one-size-fits-all – and generally cater towards male employees.
It might seem obvious, but employers need to understand that a 40-year-old woman’s life, dreams and goals look nothing like a 40-year-old man’s. So, how can we ever expect a stock standard presentation to resonate with female employees?
Research has pointed heavily towards the value of unbiased financial advice, tailored to suit women’s specific needs. It also found that women learning together with other women feel more confident and at ease, as they realise that they aren’t the only one who is experiencing a certain problem.
How employers can help
The good news is that most women who are concerned with their long-term financial future are prepared to take steps to reach financial wellbeing.
78% of women say that they are extremely interested in learning more about how to plan for their long-term financial future. 72% of women would like to receive further education when it comes to saving money for retirement. 68% of women are interested in learning more about investing money to set themselves up for a brighter future.
This leaves employers with a great opportunity to help improve the lives of their female employees by holding a Financial Wellness Program that’s tailored specifically for women.
Tailored financial wellness
Our Financial Wellness Programs address all of the questions that women in the workforce find themselves wanting to ask.
These programs provide attendees with a safe space to share their concerns with others, and are hosted by one of our female team members providing true understanding and first-hand experience with the issues that are unique to working women. These programs are designed to increase your employees’ financial wellbeing and provide them with the knowledge and skills to prepare them for retirement and financial emergencies.
If you’d like to hear more about how our Financial Wellness Program can benefit your workplace, feel free to contact me here or call us on 1300 388 285.
