Cape Town - On average women outlive men and are therefore more likely to outlive their retirement savings.
South African Medical Research council statistics show that on average a man’s life expectancy is 59.4 years, while women live to an average age of 65.1 years.
Momentum’s head of group insurance, Sandy Govender, said women also tend to spend fewer years in the workforce and experience more career interruptions due to factors such as maternity leave.
“The fact that men typically earn more than women leaves women with an even bigger gap at retirement. For every rand saved for retirement, women will receive approximately 20 percent less retirement income than men due to the expectation that they will live longer,” said Govender.
She recommended that women in their 20s should start saving for retirement. Govender said this might seem something of a balancing act as young adults tend to spend the bulk of their income and savings on cars and houses. Couples also tend to start their married lives in debt because of wedding expenses, which can further eat into one’s savings.
Bhavesh Naran, marketing co-ordinator of DebtBusters, said if women are married in community of property, that debt would also carry over into the joint estate.
“If the husband was the breadwinner, the wife would need to account for the debts, which can be difficult if the wife was not working. The wife would have to bear the burden of all payments for assets. If the husband has no life insurance, this poses a further financial burden,” he said.
Naran said that, on average, DebtBusters’ female clients have debts of R31 000, while men have debts of R48 000.
“We can see that men have more debt. This means that should husbands pass away, there is a greater burden on women to foot the bill.”
With 20 years of financial experience in retirement and estate planning, financial adviser Paul Roelofse said retiring too young was one of the main reasons many South Africans are faced with financial problems when they stop working.
“It is usually the case that women outlive their spouses and because they mostly retire at 65 years, they are left with a smaller pension to live off,” said Roelofse. On his blog, Invest for Life, he said the average South African changes jobs seven times in the working phase and 95 percent end up with insufficient funds when they retire. Even a low-risk type of investment would not be worthwhile for widows because Roelofse said it would require capital that people at retirement age cannot afford to risk.
According to Roelofse, working well beyond the traditional retirement age is the only way women can ensure they have enough money during their retirement years should their spouses die.
Cape Times