'All the Women, Who Are Independent' Start Saving for Your Retirement Now

Published December 16th, 2018 - 09:46 GMT
According to survey, nearly 46 percent of women said they have no retirement savings. (Shutterstock)
According to survey, nearly 46 percent of women said they have no retirement savings. (Shutterstock)

The World's Best Places to Retire. How often have you asked Google this question? Have you 'ever' asked the question? Just in case you are curious, the 2018 Annual Global Retirement Index by International Living lists Peru, Spain, Nicaragua, Portugal, Colombia, Malaysia, Ecuador, Panama, Mexico and Costa Rico in descending order of ranking.

Retirement - the word could plague the mind with fear for some, while for others, it might sound like a night of big wins in Vegas! Do you have a plan that will see you through the years post when you choose to stop working, be it your 40s, 50s, 60s, 70s or even later? Do you have earnings that, like Tony Robbins says in his book Money Master the Game, 'will work for you in your sleep'?

Unless we come across an elixir that prevents ageing, or a cash mine that will never run out, we have to think about retirement. That is distant future, you could argue. But is it?

In the abovementioned book, Shlomo Benartzi of the UCLA Anderson School of Management explains that "the problem is people think the future is not real. So, it is hard to save for the future". Eight-five per cent of UAE residents polled for this year's Savings Index from National Bonds Corporation feel they are still not saving enough for their future. Mohammed Al Ali, the chief executive of National Bonds, has been quoted as saying: "The index indicates that many residents have 'a mental barrier' when it comes to saving, mistakenly believing they are 'barely catching up' with inflation". 

Let us say there is an emergency this month which has to be paid for. Wouldn't we make that payment happen by cutting some corners? It could be fewer fancy dinners outside with friends, a DIY wall instead of that Italian luxury furniture set, less expensive gifts, waiting for a sale instead of picking up those hot red heels or dapper three-piece suit at full price, options to save are never-ending.

It is bad enough that a significant number of people are not planning or saving for retirement despite knowing that it is important to do so. What is worse is that women save lesser than men! Prudential's 2018 Financial Wellness CensusT reveals that "women and men on average expect to retire at age 67. But women have saved an average of $115,000 compared with $203,000 for men and nearly 46 per cent of women said they have no retirement savings". Shocking isn't it?

Unless there is a smart and substantial inheritance to thank a generous father or spouse for, there is no excuse for women to not think about, be informed about and prepared for retirement. The Census reveals that "more than a quarter of women [28 per cent] said they plan to rely on their spouse's money as a significant portion of retirement income". And here is why that might not be the smartest backup plan.

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According to the World Health Organisation, "global life expectancy at birth in 2016 was 72.0 years [74.2 years for females and 69.8 years for males]". Women live longer than men all around the world. An analysis from Fidelity Investments estimates that "a man will need $133,000 to cover health-care costs whereas a woman will need $147,000". In other words, healthcare expenditure for women is higher than for men.

Owing to the very prevalent gender pay gap, women tend to earn lesser than their male counterparts on average and are therefore likely to have accumulated less in their retirement savings accounts. Some women take a break to start a family or for children, etc., which could also contribute to set them back financially when compared to men. The combination of these factors put women at a greater risk of outliving retirement savings.

We are all caught up with today's needs, wants and bills. A few years down the line, we wouldn't want to be in a place where we cannot afford groceries, or worse, quality medical care.

Ladies, it is of paramount importance that you pay yourself first. If you don't already, agree to save a small amount of your salary - 10 per cent, 5 per cent, or even as little as 3 per cent. I insist! You can thank me later. Also, secure some financial literacy. You don't need a degree in economics, just a tiny effort to understand the basics for which you could invest in a book like Women's Worth: Finding Your Financial Confidence by Eleanor Blayney.

The chief executive of National Bonds shared priceless advice when he said: "The UAE gives people a very good lifestyle, so many do not put money aside. To help solve this disconnect, residents need to be more disciplined and start saving immediately, rather than delaying for a future date". I couldn't agree more.

By Sofya Shamuzova

The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Al Bawaba Business or its affiliates.


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