Saving for retirement in Canada: Introduction
Ladies, I’m sorry to say that there’s no equality of the sexes when it comes to saving for retirement in Canada. The truth is that women need to save more for retirement than men. That may sound like an unfair, sexist comment but it’s a financial reality and here are four reasons why.
Saving for retirement in Canada: Why do women need to save more than men for retirement?
- Women outlive men on average by four years according to Statistics Canada. This means that women have to fund an extra four years of retirement Typically the older we get the more healthcare costs we incur including the high costs of some prescription drugs and in some cases, assisted living.
- Women earn less than men. As shocking as it seems, a woman working full-time in Canada makes 73.5 cents for every dollar a man makes, according to updated Statistics Canada income data produced for The Globe and Mail in 2016.
- In addition they report that these numbers are even lower for Indigenous and women of colour. On a global scale, the gender pay gap in Canada is more than twice the global average, according to research firm Catalyst Canadam. The Canadian pay gap is on average $8,000, while globally it’s at $4,000.
- Many women take time out of the workforce. Women on average work 28 years in their lifetime as compared to men who work 38, according to Diane Garnick, Chief Income Strategist at TIAA. Typically it’s women who take time out to raise kids or take care of elderly parents. These 10 fewer years of income really impacts retirement savings and pensions..
- Women get less in pensions than men. Lower earnings coupled with less time in the workforce many times equates with less pension.
Saving for retirement in Canada: Unfortunately your dream of retirement may be just that – a dream
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