Back in the 1960’s, before the boomers began to embark on their jobs and careers, the Canadian workforce was almost 80% male. By 1976 however, it was 37% female and the percentage has been climbing steadily ever since. The boomer generation is the first to include a significant proportion of women who have spent most of their lives in the paid workforce.

Not all entered the workforce, of course, and some boomers chose lives not so very different from their mothers – marriage, homemaking and raising children. But over the years, many of those women too joined the world of work: some part-time and others determined to build careers in their forties or even their fifties. The majority of boomer women who are now making retirement plans are the first critical mass of women ever to retire from the workforce in Canada rather than simply “retiring” when their husbands did.

Related: Learn from the boomers’ mistakes

However, while women have made great strides personally, professionally and economically over the decades, they are still faced with unique set of financial challenges.

1. Employment challenge

Working women now considering retirement earned between 59 cents and 72 cents for every dollar earned by men. This has obviously affected their ability to save for retirement.

A BMO study shows that women miss out on over $400,000 in earnings by the time they reach their mid-40s because of the wage gap. The income gap is real and many women are faced with greater obstacles to achieving long-term financial health and will accumulate a smaller nest egg.

Women are more likely to interrupt their employment, have decreased hours, take more leaves of absence and are more likely to quit their jobs altogether because of family care-giving responsibilities.

Related: 10 ways for women to secure their financial future

They are more likely to have part-time employment, which often have limited retirement benefits.

2. Income Challenge

About one-third of working Canadians retire with a company pension and women are now almost as likely as men to be in this group largely because they are so heavily represented in public sector employment, such as traditional “women’s work” in education, nursing and clerical. The biggest contributor to retirement income will be these pension benefits.

But women in this group have spent fewer years in the workforce and have earned less. Because pension benefit formulas are normally based on earnings and length of service, women will have lower pensions.

Maybe you worked in an industry that doesn’t offer a pension plan. Maybe you never earned enough to save or invest. Or, maybe you lost your shirt on technology stocks or copper futures. You’ll likely find that public pensions are the primary source of retirement income. Since CPP benefits are based on earnings most retired women collect considerably less than the CPP maximum benefit.

Related: CPP’s child rearing drop-out provision

You can live on the public pension – lots of seniors do – but your options will certainly be more limited than if you had more money.

3. Age challenge

If having to rely on smaller pensions and savings weren’t bad enough, it has to stretch further because women live longer than men.

Retirement planning for women means figuring out ways to make less money last longer.

If you consider an annuity for lifetime income you will yield a lower annual payment because they are priced based on life expectancy.

4. Savings challenge

Women not only earn less, they devote less of their income to savings and investing and are significantly less engaged in managing their finances than men.

Participation in some type of retirement plan – company pension, RRSP or TFSA – is very low and savings are 46% lower than men’s.

Related: Why baby boomers aren’t prepared for retirement

Women make 38% of total RRRSP contributions. The average annual contribution is $2,100 for women versus $3,000 for men.

They have greater aversion to risk. Nearly two-thirds of respondents in a BlackRock survey said they were conservative investors. Only 19% were comfortable investing directly in the stock market.

Women feel they don’t have the knowledge, or the money, to take control of their finances, but less than 50% say they are interested in learning more about investing.

In most two-couple households, men continue to be the primary decision maker. However, most women will outlive their male partners. This is all the more reason why women should understand their household finances and have a large enough nest egg to assure comfort and security in later years.

Related: We who are about to die, etc.

Being phobic about finances allows women to fall prey to unscrupulous advisers (or greedy heirs).

Conclusion

Careful financial planning will be more critical for women retirees.

But according to BMO there is evidence that once retired, women are more likely to enjoy their retirement and become happier as they grow older. So, while it may seem that the odds are stacked against them, women also seem to be able to adapt to their circumstances.


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