Problems women face in funding their retirement
The primary influencing factors women have to contend with when setting aside funds for their retirement include:
- Interrupted income -- unpaid maternity leave, career breaks and part-time employment. Some 45pc of all Irish women aged 15-64 are not officially in the workforce and therefore have no official earnings.
- Their back-to-work salary is lower than if they had been in continuous employment.
- Reduced promotional opportunity due to time out of workforce -- leading to lower salary and employer pension contributions.
- Greater life expectancy. A woman is statistically likely to outlive a male spouse or partner. According to the CSO, there are 111,640 more widows than widowers in Ireland -- and most of them would not be entitled to occupational pensions.
- Earlier retirement is another factor working against women.
- Many women may not even start a pension until they rejoin the workforce, ie, they may be 40 years old before starting a pension.
Interrupted career paths mean that for many women who return to the workforce their pension payments are fragmented and often not consolidated.
Consequentially, they may not benefit from the pensionable employment earlier in their working life.
With the introduction of PRSAs (personal retirement savings accounts) in 2003, people can now continue to save for their retirement while out of the paid workforce.
For those women who do not rejoin the workforce they need to ensure that their spouse's pension will be sufficient to provide for them both in retirement.