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Col 4: Women are at a disadvantage

There are very sound reasons for Women’s Day. Women are at a disadvantage in many ways. Very few are explainable, but most are not.

Bruce Cameron 12Aug2023 Women are at a disadvantage

By Bruce Cameron
Co-author of The Ultimate Guide to Retirement in South Africa

The main explainable issue is the fact that women receive lower guarantee pensions from the life assurance industry than men. The reason is that women tend to live longer than men, but in the end in total returns they receive the same. At age 60 the expected average age of death for women is 84 while for men it is 79.

But the big problem is that women earn a lot less than men.

The unacceptable issues affecting women are:

  • The glass ceiling where women are not promoted to top or equal-paid jobs;

  • Women are put under undue pressure, including sexual harassment;

  • Divorce rates are increasing, with it being estimated that one in two marriages now end in divorce. A woman who has not worked during her married life may find herself destitute at retirement if she does not have her own retirement plan and the amount awarded from a former spouse’s retirement plan is minimal;

  • Many women stop working when they have children. They then find it difficult to get back into the job market;

  • Woman must understand the manner in which they are married – for example, if it’s in or out of community of property – as well as how assets you have accrued before and during your marriage;

  • Many women are involved in long-term relationships without tying the knot with a marriage contract. This can place you at risk when a partner dies. You should formalise your relationship with legal documentation, such as a cohabitation agreement; and,

  • In 1995, legislation was updated and the earliest retirement age for both sexes was made 55 from a tax point of view, but some retirement fund rules have not changed requiring women to retire early.

There are signs things are getting better, but nowhere near as close as they should be.

Some good news includes:

  • Female fund members have now increased to close to 50 percent now.

  • The amount of money, with which women retire, has grown significantly. Women are ahead in the R600 000 to R1 500 000 retirement capital at retirement. In the top R20 million plus group, where women did not feature before, they now hold 25 percent of the assets.

Some Solutions

There are some solutions. These include:

  • Many financial services companies, a lot driven by the increased income of women, are increasingly accepting the fact that women are often at a disadvantage and need more guidance.

  • There is a growing band of well-qualified women financial advisors, who are Certified Financial Planners (CFPs) accredited by the Financial Planning Institute – the best you can get.

  • Increasing women are:

  • Taking control. They do not let their partner dominate their financial decisions.

  • What is yours remains yours. If you are helping out a partner – for example, in funding a business – make it a repayable loan rather than a gift. Keep your assets in your name, particularly if your partner runs his own business that could place you at risk.

  • Understand their partner’s retirement scheme. If you are divorced you have a claim on your partner’s retirement savings.

  • Having their own retirement plan. For example, if you agree to stop working to bring up children, then contributions should continue to be made to your retirement fund.

  • Get independent advice. Your partner should use one financial planner and you another.

  • Not rushing decisions: Widowhood means taking your time with financial decisions.

There is a lot more detail on this in chapter 15 of The Ultimate Guide to Retirement in South Africa 

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