Enduring pay inequality between men and women is one of the reasons so many women in South Africa are not able to retire comfortably, says Emma Heap, Head of Retail at 10X Investments.
Gender pay gaps, according to All4Women, between men and women have been commonplace for decades in most countries around the world including South Africa, for various socio-economic reasons including the fact that women traditionally take time off from their jobs to take care of families.
A 2017 ‘Pulse of the People’ report run by market research firm Ipsos found that, on average, women in South Africa earned 27 per cent less than their male counterparts. The report, which surveyed more than 3 500 employed South Africans across various occupations and regions, found that this gap was even wider among top earners, with men earning as much as 39 per cent more than women at a similar level.
The wage gap
According to a report by 10X Investment, 32% of female South Africans feel vague and unsure about their retirement plan and only 22% of men feel this way.
“The wage gap may go some way to explaining why so many South African women are not prepared for retirement when the time comes around,” Heap said.
“Providing for retirement, frequently left to male partners in a relationship, is a classic empowerment issue,” says Heap. “Not being dependent on someone else for financial planning is very liberating. The same goes for knowing your future is taken care of.”
Heap says that getting involved in the family’s long term financial planning is often a key step in a woman taking charge of her life. “Women must believe in their ability and the value they can add at all levels of life.”
After all, she says “women naturally take charge of many important, complex family decisions, such as the household budget, what the family eats, and where the children go to school. There is no doubt that women are more than capable of understanding how to save for retirement.”
There is no better moment than now
Accordingly, Heap says investing 15% of your salary for 40 years in a high equity fund and paying less than 1% of it away in fees will ensure a decent retirement.
“Many women, and to be frank a lot of men too, have been brainwashed into thinking they could not possibly make the right choices for themselves without expensive advice. This is just nonsense,” says Heap.
Heap’s advice to women is to take control and be actively involved in all of the key areas of their lives, including planning for retirement.
“There is no better moment than now to start planning for then. Don’t believe anyone who tells you your life and future are too complicated for you to manage. Retirement planning is largely about sticking to a simple plan and making sure you get the best value for your money/savings over the long term,” says Heap.
Sources: https://goo.gl/LLSHKn and All4Women