1. Pausing Your Career to Care for Children
First, women frequently step out of the workforce in their 20s, 30s, or 40s to care for children—a time when their job might just be kicking into high (or higher) gear.
It’s a noble cause, of course. But consider this: A long break from the workforce can result in several financial losses beyond the immediate loss of a salary.
In the near term, it can mean an interruption in saving for retirement and the loss of any employer match, the loss of other employee benefits like health or disability insurance, and the postponement of student loan payments.
In the mid term, it may mean a stagnant salary down the road due to difficulties re-entering the workforce and/or a loss of promotion opportunities.
And in the long term, it may mean potentially lower Social Security retirement benefits because your benefit is based on the number of years you’ve worked and the amount you’ve earned. (Generally, you need about 10 years of work, or 40 credits, to qualify for your own Social Security retirement benefits.)
2. Gender Pay Gap
Second, women generally earn less over the course of their lifetimes. Sometimes this can be explained by family caregiving responsibilities, occupational segregation, educational attainment, or part-time schedules. But that’s not the whole story. A stubborn gender pay gap has women earning, on average, about 82% of what men earn for comparable full-time jobs, although the gap has narrowed to 89% for women ages 25 to 34.* In any event, earning less over the course of one’s lifetime often means lower overall savings, retirement plan balances, and Social Security benefits.
3. Longevity
Third, statistically, women live longer than men.** This means women will generally need to stretch their retirement savings and benefits over a longer period of time.
If you have questions, contact the experts at Henssler Financial:
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- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
