Gender inequality in preparation for retirement is larger in Australia than Britain and the United States. A survey asked 2,953 working men and women aged 18 to 64 in the three countries how prepared they were to meet risks once they stopped work, including the risk they would outlive their savings. While over half of respondents expected to live a "poor or modest" life in retirement and a third said they had no plans to ever retire, the survey found retirement readiness was highly dependent on gender. More men than women said they were on track for retirement in all three countries, but what is startling is the level of the gender gap in Australia.
In the United States, the gap is 15 percentage points between men and women on being on track with their retirement planning, while in Australia it is 22 percentage points with 54% of men prepared, compared with 32% of women. In Britain, the gap is 7 percentage points. The gender gap is often a result of lower wages, interrupted work patterns and longer life expectancies of women.
Nevertheless, the Retirement Readiness report, written by the Actuaries Institute Australia, the American Academy of Actuaries and Britain's Institute and Faculty of Actuaries, speculates about other factors that may make the gap appear larger than it actually is. "Women might feel less responsible, especially if they live in households with men who take care of this financial responsibility," the report's authors noted. "Or, it might be that men, feeling that they ought to be able and willing to handle these responsibilities, exaggerate their preparations, creating an appearance of gendered differences in preparedness where none exists."
The biggest gaps in preparedness across the three countries included not knowing how much was needed to retire, how long retirement savings would last or what would happen if someone was unexpectedly forced to stop working. While cultural reasons may cause men and women to answer questions differently about their retirement preparedness, there is plenty of data that shows there are genuine financial differences. For example, the Financy Women's Index; an index designed to track women's financial position found that the average super balance of women, across all ages, continues to lag that of men at 70% of the average male balance.
However, there is some better news for Australian women in that the index finds the gender pay gap has been reduced. Based on average weekly ordinary full-time earnings, the gap narrowed to 15.3 percentage points, the narrowest it has been since 2006. At the end of June, the female participation rate on a seasonally adjusted basis was 59.7%, a record. The index also shows relatively strong growth of female enrolments in tertiary education.
While there is progress being made, there remains a long way go to close the gap.
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Aussie retirement gender gap much larger than US and UK
Posted on 15/03/2018