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A stitch in time

women in retirementInternational Women in Retirement

Women in retirement account for a growing segment of the global population but, despite advancements in female workforce behaviour, an increasing percentage of elderly women are finding themselves facing poverty during retirement.

Women working internationally can be particularly prone to finding themselves in a difficult situation when it comes to retirement. In today’s Western World there is a relative lack of options to accommodate women’s circumstances in providing a sufficient pensionable income. A recent global study by HSBC highlighted the difficulties that women are facing around the world, with a mere 11% of female respondents from developed countries feeling prepared for retirement.

The direct link between retirement income and waged labour, along with the lack of recognition given to non-waged labour, are key issues contributing to a women’s disadvantaged position.

Contributing factors to these difficulties include the fact that women are more likely than men to work part time or take career breaks due to childcare and family commitments. They are also more likely to care for an elderly relative and bare the associated costs. Women will ordinarily take an earlier retirement than their male counterparts and even today, women can often remain subject to lower wages than men.

All of these elements have the potential to significantly reduce women’s pension contributions. Add to these issues a longer life expectancy and women can find their modest pension pots have even further to stretch leaving them with a disappointing income through later years.

There tends to also be an assumption that household structure or marital status is permanent rather than transient, but women can effectively be financially penalised for divorce.

In a broader sense too, retirement is becoming an increasingly challenging arena as final salary pension schemes are continuing to close to new members. While the retirement income frameworks of various international jurisdictions’ differ considerably, there has been a general pattern of change towards policies favouring individual, defined contribution retirement savings accounts – often providing less of a return.

For international women, the situation can be exaggerated by their often inconsistent circumstances. Many are likely to be in contract employment and therefore limited to a short term outlook, feeling unable to plan sufficiently ahead. Any pension fund acquired in the home country is usually frozen upon emigration, and there are tax restrictions for those wanting to transfer.

Working internationally could, however, prove to be advantageous in some respects. Firstly, international workers are likely to be enjoying a higher salary and will be in a privileged savings and investment position. They will have greater investment flexibility, be unrestricted by domestic investment regulations, and are also eligible to invest in cross border pension plans which can be beneficial for those who are continuously mobile. With the help of an International qualified financial adviser, these benefits could prove especially constructive for retirement plans and there are some unique tax advantages to capitalise on for those working internationally.

Gender issues in retirement provision are extensive, just as they can be throughout the financial lifecycle. Differing risk profiles of male and female investment portfolios, for example, can have a specific impact on their financial productivity and, similarly, there is debate over the use of unisex mortality tables in the calculation of annuities. Ultimately, there are differences between the sexes that can not be ignored, but women should seek professional advice in order to identify solutions suited to their circumstances for a well-deserved, comfortable retirement.

Guardian Wealth Management conduct regular workshops and seminars aimed at providing independent and unbiased advice from a perspective of International Working Women. Guardian Wealth have worked with many International Women’s Associations throughout Europe are sponsors of this years W.I.N conference in Prague.W.I.N. (Women’s International Networking)

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