Women need to plan better for their financial future

By Janice Roberts

Katherine Barker, Head of Momentum FundsAtWork

Busy South African women juggling a myriad of responsibilities often fail to prioritise planning for their financial future. Katherine Barker, Head of Momentum FundsAtWork, says women face different financial risks to men and need to take ownership of their financial future. The right umbrella fund offers female members the flexibility they need to address their unique financial challenges.

According to Barker, two key areas financial advisers need to highlight for female clients are adequate retirement provision and critical illness cover.

“Many things work against women when it comes to saving enough for retirement. For example, women often spend less time working than men because many women take time off to raise their children. This means they have less time in which to accumulate retirement savings.”

Another challenge for women is that, on average, they tend to live longer than men. The 2017 Statistics SA figures estimates life expectancy at birth for men at 61.2 years whereas women’s life expectancy is 66.7 years.

Barker says, “With women living longer, the cost of buying a pension is higher than the cost for a man, as the pension must be paid for longer. For example, a woman retiring between 60 and 65 will pay 13% more than a man of the same age buying a pension of the same value.”

“The right umbrella fund proactively helps women to overcome these challenges by offering flexibility in terms of retirement contributions and insurance benefits. This makes it possible to channel more money towards retirement savings. For example, FundsAtWork makes it easy for members to automatically increase their annual contribution rate or make additional voluntary contributions. Access to benefit counselling and financial education also enables FundsAtWork members of all genders to make better informed decisions that bolster retirement outcomes.”

The prevalence of critical illnesses such as cancer and heart disease is growing at an alarming rate. This is why FundsAtWork employers can select from a range of flexible insured benefits, including critical illness benefits. However, only 16% of FundsAtWork members are currently covered in the event of critical illness.

Barker urges employers and their financial advisers to ensure all employees, male and female alike, have access to group critical illness benefits. Medical scheme cover is seldom sufficient to cover all the costs associated with a critical illness.

Critical illness cover is not only important while working but also during retirement. The risk of most cancers increases with age and, according to the Centre for Disease Control and Prevention, 50% of breast cancers are diagnosed after 50. “Fortunately FundsAtWork members, if their employers have selected this benefit, have the option of converting their group critical illness cover to individual cover at retirement or when they resign from their employers” says Barker.

Barker concludes, “Women bring unique qualities and valuable skill sets to the workplace, contributing significantly to a business’s success. Employers and their financial advisers need to ensure their retirement fund and insured benefits are flexible enough to help women address their unique financial challenges.”


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