Donna Phelan, Author of Women, Money and Prosperity: A Sister’s Perspective on How to Retire Well says “Women who are near retirement are starting to wake up to the financial realities and are making good choices, such as delaying the start of retirement, if necessary, and taking an interest in their own retirement plan.”
I am relieved to know that Donna Phelan is optimistic about women in retirement as I hear from so many women who are not. Many media sources point out that women are less prepared for retirement than men. An Allianz Life Insurance study in the U.S. revealed that 49 per cent of women are concerned about becoming bag ladies in their senior years! In Canada, a Sun Life study found that 47 per cent of women polled were dissatisfied with their savings and over 50 per cent were NOT confident in their understanding of financial matters. Take heart.
Donna Phelan graciously agreed to doing an interview with me. I asked about the obstacles that women face and she outlined the socio-economic factors like lower earnings, fewer promotions and perks, and workforce exits for childcare or eldercare. She suggested that women need to take responsibility for their financial well-being, develop their own financial plans, and become financially literate by learning the language of money. She also suggested that women may also choose to delay retirement, work part-time or start a business in retirement. Another interesting idea was to choose non-traditional residence sharing to reduce costs and isolation. She also encourages women to form SISTER’S CLUBS to discuss how to create retirement income, educate and support each other, generate ideas and business ventures and have fun! These are all great ideas on helping women face their fears about retirement.
The retirement gender gap is even bigger that the gender pay gap! Getting good professional advice may be the next step but…
Have financial planners failed us?
Rob Carrick wrote an article in the January 31st Business Section of the Globe and Mail called Advisers and Women: Is Anyone Listening? He points out that a survey found 73 per cent of women were unhappy with the service they got from the financial industry. The problem appears to be Rodney Dangerfield’s complaint, “No Respect!”, from the 85 per cent dominated by men industry. Communication is a two way street and women need to take the time and energy to educate themselves, interview as many advisers as it takes to find a trusted one, articulate their goals, and keep eyes on the money ball.
Related article: Questions to ask your financial advisor
Advisers also need to appreciate that women’s brains have a larger worry centre than men’s, the cingulate vortex, making them unsure and often conservative in their approaches to investing. They also have less testosterone and are then less likely to take risks compared to men. Advisers need to listen carefully and look at the whole picture of a woman’s situation as those women strive to build and preserve wealth. At some point, over 80 per cent of women will be on their own in retirement and need a plan that will address longevity and security. They may be worried and conservative for very good reason!
Quieting the inner nagging voice
As I do my Women and Retirement courses, I hear statements like, “I wish I had saved more… started sooner to plan… got a union job… stayed at my first job… had a job with a pension… had not gotten myself into so much debt…” and many more like this.
This is the time to get proactive, educate yourself, be confident and goal oriented, and communicate clearly with advisers, and talk to your friends about finances and the futures you wish to create. There are lots of resources for women:
- Read Donna Phelan’s book,
- Gail Vaz-Oxlade’s books and website,
- Jan Cullinane’s, Single Women’s Guide to Retirement,
- follow websites like retirehappy.ca, moneysense.ca, getsmarteraboutmoney.ca,
- take courses,
- read that business section of the paper like (theglobeandmail.com),
- find trusted advisors and mentors,
- check out Money Coaches Canada
- start a SISTER’S CLUB
- Use retirement calculators with a big grain of salt,
- go to insurance companies’ and banks’ websites to learn as much as you can.
Build your confidence, set your goals, and know that lots of us are doing just that and that talking about money is not a taboo.
Donna Phelan says, “Some women lack confidence in their financial skills. They may feel embarrassed, fearful, confused or anxious about retirement, especially if they have debt or low savings, so they don’t talk about it. That’s the worst thing women can do.”
Ignorance is not bliss and denial not a useful strategy! Face your fears about retirement head on!
I welcome your comments and experiences here.