Latest life expectancy figures highlight the need for women to contribute more towards retirement

The latest population statistics released by Statistics South Africa, which revealed that women are expected to live on average four years longer than men, has highlighted the need for women to take retirement planning more seriously.

According to Greg Woolls, Business Unit Head, Aon Hewitt South Africa, the longer average life expectancy for women means it is likely that they will need to save considerably more during their working lives in order to support themselves during retirement.

“While four years may not seem like a lot, it can have a major effect on the ability to retire comfortably. The additional savings that is required for these additional years makes the task of saving enough for retirement exceptionally challenging.”

Woolls says that this task is made even harder for women as they are more likely to work in part-time jobs that don't qualify for a retirement plan. “Working women are also more likely than men to interrupt their careers in order to have children or take care of family members. Therefore, they work fewer years and contribute less toward their retirement, resulting in lower lifetime savings.”

Females are also likely to earn significantly less than their male counterparts. A recent survey has revealed that South African men earn 41% more than their female counterparts, especially in senior executive positions. This means that they are contributing less towards retirement funds in the long run.

He says that another challenge for women is that many still rely on their spouse when it comes to retirement savings. “Unfortunately, this does not always mean that they will be in a financially secure position in their golden years. Women need to be proactive when it comes to retirement savings. They need to realise that it is their own responsibility to ensure that they have adequate retirement savings.”

Woolls says that women not contributing to a company retirement fund should consider a personal retirement annuity. “It is recommended that individuals contribute at least 15% of their monthly salary towards retirement in order to maintain a reasonable standard of living once retired, but this would depend on how long they have saved for. In order to plan effectively, we recommend that all females consult a financial advisor at least once a year.”