4 Financial Challenges that Women Need to Address


There’s no doubt that the last century has seen undeniable change in the economic opportunity and social status of women in Canada and in the west as a whole. Women have increasingly become the breadwinners of households (30% of homes today), as well as occupy the majority of professional positions in the workforce (57%, according to BMO Wealth.)

With a newfound financial pedigree, however, come new financial challenges that are unique to women. In truth, the changing status of women and the economy of Canada on a whole have left women with personal and financial hurdles to climb to help achieve the equity and security that they deserve.

#1: The Issue of Greater Longevity

Mature woman reading book

One thing women, and indeed all people will struggle with in their lives, is the unavoidable and inevitable issue of mortality. Only with women, the problem is a little more unique – women live significantly longer than men. As of 2009, men have their life expectancy in Canada at 79 years, while women on average are expected to live to 82.

And 82 is merely an average, with half of women expected to live past that age, making it a not-altogether useful number for planning your life around. With a longer life comes the issue of longer ongoing costs, including living and health care costs which only rise as we age.

Living longer is both a blessing and a curse that women have to address, by offering more opportunity to participate in life at old age – but also to manage the costs that will entail.

#2: Retirement Saving Tend to Get Neglected by Women


As we’ve noted above, the prevalence of women in professional roles in the workplace is solely on the rise.  On the converse, however, we’ve seen a decline in the availability of social safety nets, and women have felt the bite far worse than men. And there’s a number of reasons why this is:

  • Women still earn, on average, 87 cents to Men’s dollar, hurting their overall earning potential;
  • Alongside that, women feel moreso than men that the cost of living impacts their ability to save for retirement (55% of women to 46% of men, according to MoneySense.ca)
  • Women are most often pushed into situations where they lose work due to personal circumstances, including care-giving (more on this in point 4, however);
  • Finally, financial resources and wealth management tools are not well marketed, demonstrated, or supported for use by women, resulting in lower engagement with retirement planning. 46% of women report not adjusting their retirement investments compared to a mere 18% of men.

If you combine these challenges with the fact that women are likely to live longer and spend overall more, it becomes a bit of a perplexing conclusion – both for working women and for financial institutions: if Women need financial resources to succeed in their retirement goals more than Men, why are they being neglected?

The cause is on two fronts: both in the financial industry’s lukewarm acceptance of women as primary earners and on a reluctance in general, for both men and women, to take retirement planning seriously. While women report a similar level of participation in retirement planning as men, the lack of upkeep and detailing on their plans have left them with lost opportunities and, as a result, a retirement plan that is somewhat lacking.

If you’re seeking retirement planning advice, it’s important to look for a financial expert that understands the unique, tangible, and ongoing financial challenges that women alone face. That way, you can be sure your hard-earned money is going to the right plan and being managed properly for your retirement needs.

Why women lag in retirement planning

#3: Insurance Planning Tends on the Wayside


Progress in the workplace is a little bit of a double-edged sword. While women income growths are twice that of men, the need for income protection and debt security is also on the rise as these earning translate into an increased financial obligation to family and to creditors.

Life insurance is by and far the most effective way to secure your debts and put an income replacement plan in place. Life insurance for women is, in fact, a wiser investment than life insurance for men is due to the fact that women pay, on average, 25% less for an identical policy. While part of this is offset by women living longer, there’s also the truth that women are considered by most insurers to exhibit less risky behavior than their male counterparts.

Women, however, should also seriously consider the benefits of critical illness insurance and disability insurance as potential secondary avenues for income protection. This is in part due to the prevalence of women being hit more frequently with survivable critical illnesses, as well as a marked higher rate of debilitating illness. While not everyone will need these plans, they are of special interest to professional women.

#4: Women are Earning More, Rising in Careers, Yet Haven’t Escaped the Caregiver’s Burden


For all the progress women have made over the last century, there’s one last bulwark which has been especially challenging for women, and it’s hugely overlooked by most financial planners.  That challenge is the “Caregiver’s Burden” – namely how women tend to be stuck with it and not men.

  • Women are more likely to be primary caregivers to children or aging parents than men (52% to 40%);
  • Women are three times more likely to lose wages because of a requirement to provide care to another person, and are more likely to exit the labor force due to the demand for care;
  • Women spend, on average, twice as much time as men in a caregiving role, even when both parties are employed full-time.

It’s a burden that, in all truth, flies in the face of how we consider the changing role of women, and is rooted in a very traditionalist mindset of how women “ought to” establish their role in society. This role, regardless of context, poses a risk to financial security and wellbeing for all women. And the nasty truth is that there’s no wholesale remedy to the problem: women simply have more demands than men while earning less than them.

That’s why we want to put a fresh face on the financial challenges of women.  Namely: no matter your circumstances and your station in life, there’s a better way to manage your finances, and there’s no more urgency needed than one clear fact: women are becoming rulers of the world, and that requires they keep up with their finances to make the most of what they have.