Wage Difference of Financial Planning for Canadian Women

A study carried out in 2017 indicated that females are paid approximately 82 cents for each dollar made by a man. It seems to interpret into a female having to invest more efforts in working for almost four months for making the same annual income as a man. It indicates that among millennials, females are closer to equality in pay. It is completely true that life is uncertain. There can be unexpected turns in life and sometimes, they can leave the person dazed. In addition to it, being not ready leaves females influenced by their circumstances. Actually, it can be said that it is common for females to fear their future when they are not clear about their financial condition. Maybe fear is warranted, recognizing some of the figures or statistics: in accordance with the Census Bureau, 59 years is a widow’s average age, and 3 out of 4 females are seemingly widowed by 75 years of age.

The divorce threat is also real with twenty-five percent of divorces including people in relationship with more than the age of 50. In accordance with the Pew Research, the rate of divorce over fifty has doubled since the 1990s. And in some cases, women are motivated by the discomfort caused by uncertainties to be engaged in financial management before something adverse takes place. Normally, females are the primary caregivers for families. They take on different roles for caring for their whole family. For their children, they take the role of mothers and tend to care for their kids. For their husbands, they become wives and for their parents, they become daughters. The average caregiver, in fact, is a forty-nine-year-old woman who offers twenty-four years of care to an old female relative. When women continue to offer such services, it causes them to leave the workforce sooner than when men leave the workforce. It indicates that their savings for retirement and other options for wealth-building are more likely to be decreased by the unexpected requirement for care to someone. In simple words, it means that sometimes when care is required by a close relative, they might have to leave the workforce and prefer tending to their close one. This plays an important role in hindering their pursuit of both saving and making money.

Commonly, females have different objectives for their portfolios of investment. Although it is indicated by statistics that men tend to be more focused on the performance of the investment, females are more oriented towards goals. It means that females focus more on just how their money can be utilized for meeting the life objectives, including supporting both the charity and their closed ones. Being smart and efficient in knowing how they should be giving to other people, allow females to be tax-efficient and keep a strong control over the dynamics of their family finance. When females are close-fisted and prioritize their spending, they are able to save more money and spend on deserving sources.

In a second marriage, there are sometimes challenges and issues which emerge from the competing necessity for assets and resources for an aging female and the need to leave assets and resources for children from the previous marriage. Although obtaining a life estate in a house, share of accounts of retirement, or a death benefit of life insurance can assist in securing a future of surviving woman, these don’t prove to be permanent solutions. It means that at some point, they are meant to disappear and a woman cannot depend on them for a long time. It is mainly due to the fact that owners of these assets retain the capability of changing her or his mind. They are not needed to offer a reason for making changes in the beneficiary, and in accordance with the type of insurance or account, they might not be needed to notify the individual. It is not rare for a partner to find out that they aren’t a beneficiary of the held or promised asset after their spouse’s death.

Females can decrease the chance of late unexpected events by taking a proactive step or action, including creating legal obligations through a postnuptial or prenuptial agreement, irrevocable provision in the plan of the estate, or being the owner of the policy of life insurance written on the life of her spouse. The study conducted by Fidelity indicated that only forty-seven percent of females exclaim that they would be quite confident in investing and discussing money on their own with a financial expert. Many statistics, unfortunately, point out females should be comfortable in having such types of discussion because eighty percent of men seem to die married while eighty percent of the females die single, in accordance with the Institute of Women for Secure Retirement. It means that whether we plan or not, handling and managing our finances will be needed at some point in life.

Currently, 14 trillion dollars are controlled by women in the United States of America besides Canada, in accordance with the Wealth Institute of Bank of Montreal. And at the moment, this figure is growing. Over the upcoming generations, females will be inheriting seventy percent of the wealth. In accordance with the Advisors Council of Family Wealth, women will be holding two-thirds of the wealth of the nation by 2030. In such a situation, it would be no doubt unfortunate to not be capable of controlling their finance.

The average of expectancy of male life is approximately 76.5 years and the expectancy of a woman slightly over 81 years, in accordance with Imperial College of London and WHO or World Health Organization. A higher lifespan is one of the key reasons why old women are twice likely to face poverty compared to makes of the same age. No doubt, healthcare cost is one of the largest financial risks. It keeps on increasing and can pose a significant threat to the financial status of a woman. It has been determined that the average cost of healthcare for a couple in retirement will be almost 280,000 dollars after tax. Moreover, it doesn’t include the long-term cost of care. These numbers are enough to tell about the risks which might be faced by a woman if she doesn’t plan about it.

It is also significant to realize that 5.3 million individuals aging 65 and over this age are diagnosed with Alzheimer and sixty-two percent of these people are women, in accordance with a study conducted by Alzheimer’s Association. Once a female turns seventy-five years old, there is actually a seventy-percent chance that she will require assisted care at some instance during her life. Increasing costs of healthcare along with the costs of long-term care increasing at a very rapid rate are presenting a need for advanced planning, especially for women.

If we talk about investing, we can undoubtedly say that it is never early to start creating a play that covers your future. Even small increments in regular deposits of investment can improve the size of the portfolio along with the longevity of your present assets. But a very small part of individuals invest when they are experiencing the actual wonders of life and stand to gain benefits from the potential of compounding. Often, couples are also ineffective in communicating about their financial matters until later in their life. The surprising thing is that it is supported by a study conducted by Fidelity which indicated that seventy-two percent of surveyed couples feel they feel great in how they discuss money. Still, fifty percent of the couples have no idea just how much should be saved for retirement.

Census Bureau reveals that millennials are quite slower in getting married than any prior generation. Only twenty-six percent of adults, in 2013, were married in comparison with thirty-six percent of adults of the same age in 1997. This percentage only increases as we go back further in time. In addition, the present generation seems to have higher levels of debt because of higher housing and educational costs. In comparison with their parents, their financial security is at a higher risk. Thus, by gaining education about the management of money, financial responsibility can be modeled by women to their daughters and sons, which will improve their financial health.

Even with figures indicating that females might have less access to higher financial education through basic or traditional means, free resources are limited. And although the amount of decision in investment services and products can be dizzying, women can get to resources with some effort which helps them in learning the fundamentals of investments. When investment selection is concerned, a simple start should be preferred. An example would be to choose a fund of the low-cost passive index or utilize a diversified portfolio model for the investments of retirement plan.

Advisors should be chosen who are willing to answer the questions while establishing a proper and regular schedule for reviewing the performance of investment and overall condition of finance. Taking advantage of economic power is a way for females to empower their position in their families. If a female is not completely dependent on a person for securing her future, she is actually free to lead an independent life with a variety of choices. Although improvement is becoming evident, the gender gap still exists in investment and financial literacy, and it seems to exist in the millennial generation as well. There is still a significant need to work and reduce this gap for improving how women manage their finances.

Since females have longer lifespans and financial challenges are faced by them which are brought by less time investment in the workforce and lower earnings, they cannot afford to be disengaged, underinvested, and uneducated from their finances. It can be said that it has become their necessity to have knowledge about financial management. As the influence and power of women are still expanding in the world, it is only natural that they must take more accountability for wealth and how they are living in their families. Women, around the globe, lag behind men in terms of financial literacy. And this difference has significant implications. For instance, financial knowledge results in better decisions related to finance, a large range of benefits, and greater success in terms of finance.

On the basis of research and data over the previous 5 years, experts now have a clear understanding of the basis of this gap, along with more informed and sensible solutions for ensuring the empowerment of women in terms of finance.

The contribution of Claudia Goldin, an Economics Professor at Harvard University indicates a foundation for the present gap among genders. Articles of Goldin on gender gap and employment of women point out that disparities seemed to begin with a shift towards economic contributors from females as simple non-workers. Looking in the past, almost a hundred years ago, the 1920s proved to be a period of significant economic growth in the whole world. And not only it is recognized as the modern period with critical economic developments, it also saw an improvement in the job opportunities of women along with an increment in the participation of labor force which continued to rise steadily.

During this period, most of the females didn’t hold employment opportunities outside their house, and those who grasped these opportunities were normally unmarried and young. Only twenty percent of females were recognized as gainful workers, even though it is significant to note that contributions of women to the economy have been undervalued and understated beyond housekeeping and childrearing. Thus, it can be said that from a long time now, the contributions of women have been undervalued. But now, they have more influence now and they should take its advantage.

In previous times, females weren’t only kept out of the workforce, but out of wealth management and financial decisions of their own families as well. And it was not rare for the young females to hear the message that it was the responsibility of a man to manage money. After educational, political, and social strides by 1970, about forty-five percent of women, both unmarried and single, were taking a part in the workforce as critical or gainful workers. In addition, it was not until the later part of the twenty century that males were surpassed by females in the labor force accounting for fifty-seven percent of the total population.

Considering the fact that nearly a century has been consumed by females to integrate themselves into the workforce of the nation and earn wages separately from men, it is not that hard to understand why the financial literacy and education has trailed behind. And now that females have their own money to handle, a proper discussion is required about reevaluating the generational and societal messages which have passed down about money and women.

It was indicated by a Canadian Statistics report that females do not feel they have the very same level of confidence and financial literacy as men. It was determined by the report that females were less likely to recognize themselves to be financially intellectual than men. It was also revealed by the report that they are likely to state that they have enough information and knowledge about investments for choosing the right options which are suitable for their future and conditions. It is clear that a lot has yet to be performed for improving the confidence and knowledge of women when it concerns their finance management. Kelley Keehn, finance consumer and educator advocate with FPSC stated that it is actually an opportunity of seeking education and growing efficiently and laying the claim to financial independence.

However, as an industry, it is possible to help. The financial education of women can be supported through conversations and discussions with them. And as females get more comfortable in this region, a greater control feeling will be gained by them around the matters of finance. This confidence and knowledge will play a significant role in future success in the lives of females.

What does it mean?

            It means that Canadian women now have more opportunities than ever to improve their financial awareness and knowledge. Now, they have the resources to get an education and weighing the benefits obtained by managing money, the initial costs are nonexistent. In this book, we will be presenting a useful financial tip in each chapter accompanied by real-life stories of women who adopted the tip and how did they manage their budget to become successful. By becoming capable of managing money and financial decisions of yourself and your family, you can effective manage how you survive in society. In fact, if you are a housewife, you can share the burden with your husband and participate in managing the budget of your whole family. These are some of the numerous advantages which you can achieve by gaining financial knowledge.