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Vancouver, BC (November
27, 2000): It is no secret that women
live longer than men. In fact, in Canada, women
who retire at 60 can often look forward to enjoying
in the vicinity of 25 to 30 years of retirement
life - that’s five years more than most men.
That’s just one important reason women need
to plan early, and wisely, to ensure they will
have enough income to comfortably see them through
their retirement years.
There are five other significant
reasons for women to plan early:
- First, women, more than men are affected financially
by life events such as marriage, children, workplace
earnings and divorce.
- Second, women generally have shorter working
careers, but longer life spans, than men do.
This increases the challenge of accumulating
sufficient capital for their retirement needs.
- Third, women are more likely than men to be
the ones taking care of children and aging parents.
This also places additional financial pressures
on their capital requirements.
- Fourth, because women tend to outlive men,
widowhood will at some point force them to become
totally responsible for their financial well
being.
- Fifth, women tend to be more conservative
investors, investing less in growth equities
than men do. This introduces additional constraints
in developing a rewarding long-term plan that
meets their ‘longer-life’ requirements.
For example, due to their different
life expectancies, a woman who is 47 years old,
and wants to retire at age 60 with an annual income
of $75,000 (in present day dollars before income
taxes), needs to accumulate a significantly larger
investment portfolio than a man of the same age.
The man needs to reach approximately $2.0 million
by the time he retires, whereas the woman needs
to accumulate over $200,000 more to ensure the
same annual income throughout her lifetime.
In summary, because women live longer,
and often have more financial obligations than
men, it is critical that they develop a life-long
investment plan that will meet their many requirements.
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