While there has been progress made in terms of gender equality in recent times, it is clear that there is still much more that needs to be done. The gender pay gap is one of the biggest issues in the workplace right now, especially when you consider that it is not just career earnings that this will impact as it will also result in women having a smaller pension at retirement.
The Retirement Gap
The gender pension gap is a serious issue that needs to be addressed. Additionally, it means that women need to plan their retirement finances and make sure that they have taken action to try and bridge the gap as best they can. Key Advice CEO, Will Hale, commented on the worrying issue of the gender pay gap and its impact on retirement finances:
“With women typically earning less over the course of their careers, more likely to work part-time or need to juggle their career and caring responsibilities, the gender pay gap quickly becomes the gender pension’s gap at retirement. It is disheartening that in 2021, women still expect 25% less than their male counterparts and nearly a third expect their income to fall below Joseph Rowntree Foundation’s (JRF) Minimum Income Standard. There is no quick fix to this situation but it does illustrate how important it is to consider all your assets at retirement.”
So, what are a few of the best steps that women can take to plan their retirement finances?
Many people are turning to equity release these days and it can certainly be an effective way to give your retirement income a healthy boost. Essentially, equity release is a way of freeing up the value in your home. The loan amount and any interest are paid back by selling once the last borrower dies or they move into long-term care. Equity release can be a great solution for many homeowners, but there are key considerations so you should always speak with an equity release specialist to see if it is right for you.
Anyone looking to grow their wealth and build towards a brighter retirement may also want to look into passive income streams. This can be a smart way to boost your income while you work and requires little effort once it is up and running. There are a few passive income options, such as rental properties, affiliate marketing and dropshipping businesses.
Investing is also a smart move for anyone looking to improve their retirement fund. Obviously, there is risk when it comes to investing, but options like index funds can be a smart way to diversify and build wealth over time.
There is no quick fix to the gender pay gap issue, which means that it is important that women are planning ahead when it comes to retirement and doing all that they can to boost their finances.