How should we evaluate age in the equation of worth, and is it perceived differently for women? Despite growing older being a shared experience, cultural norms often determine a subset of the population’s ability to work and create wealth based on age. Why should women’s value diminish as they age, both in terms of their contribution to society and financial opportunities? Although this perception has changed in recent years, there is still a significant opportunity to shift the cultural norm that disempowers women, especially later in life when financial knowledge and security are more critical than ever.
Dawn Thomas, Senior Financial Advisor at The Weath Designers, sheds light on the dynamics that contribute to women’s marginalization and offers solutions for reframing the equation.
REFRAMING THE CULTURAL DEPRECIATION OF OLDER WOMEN IN CAREER AND CAPITAL
Older women, especially single women above 60 have garnered the heartbreaking title of the new face of homelessness. It is devastating to know that life events such as having children and going through divorce, can provide women with an insurmountable amount of financial catch up that they have to generate before their retirements. Through systematic barriers and cultural belief systems, women are expected to give their time and money, for the service of everyone else and at the expense of their own financial security. Studies have shown that the risk factors of homelessness for older women is their inability to purchase a home, sustain a mortgage, afford the increasing prices of a rental property and in previous years, budget cuts to public housing.
The 2018 Gender Gap in superannuation was reported to be 62%, meaning on average women had about $80,000 in superannuation and would need to increase by 62% to reach mean’s average super balance of $130,000. The reasons for a lower amount of retirement savings for women as outlined in a 2022 study by Professor Alison Preston and Professor Robert E. Right, “lower-life time earnings than men due to gendered differences in employment participation, hours worked and wages and is the product of normative and social factors such as gendered norms surrounding work and family care”. A 2019 study showed that the early phase of paid working life, during the accumulation phase of retirement savings, demonstrated a large gender superannuation gap due to part time work or career breaks. Confirmed by various studies, women on average are less financially literate than men, and this contributes to part of the gender gap in superannuation balances.
Association of Superannuation Funds of Australia (ASFA) releases a retirement standard report every quarter and currently a single person, who is a homeowner requires about $51,000 a year in income from the age of 67 and would need about $595,000 in retirement savings to generate this.
How can women now, after a life of service, who find their value depreciated culturalLY, create the next chapter filled with possibilities, purpose, and autonomy?
STEPS TO RECLAIM YOUR WORTH AND EMPOWER YOUR FUTURE
Take Control: Go to the ASFA Retirement Standard site to determine where you sit with your current retirement savings versus what you need. There are calculators available on Money Smart (ASIC) site which can also guide you on how you are tracking towards your retirement. There are various podcasts and books available to help you with your knowledge journey such as “ The Money Sandwich” by Marc Bineham and “ The Joy of Money” by Kate McCallum and Julia Newbould, “ The Grass is Greener Podcast”, Spending Plan Course by Glen James (currently free).
Serve yourself first: In this phase of your life, your financial security is of the utmost of importance. Generosity by gifting time and money to children or grandchildren has its price. Especially if you find yourself behind on where you are, you simply cannot extend that generosity of finances to loved ones, without first considering your economic safety at retirement.
It is not too late to make a difference: Consider if you may want to work a bit longer, to squirrel money away into your retirement savings. It is more common now for people to be working longer on a part time or casual basis. It not only keeps them with more social interaction, but you also draw down less on your retirement savings. The goal is to find a job that values your worth and gives you purpose and joy.
ABOUT THE AUTHOR
Dawn Thomas CFP®, SSA is a self-professed superannuation nerd, a part-time PhD Student researching the superannuation behaviour of Gen Z, and a mother of three. She launched The Wealth Designer’s Start Well program in 2023, which is designed to help young people to be empowered financially. When she is not providing financial advice, she relaxes by cooking for loved ones or playing hockey.
In 2020, 2021, 2022, and 2023, as a recognition of financial literacy work and advocacy of the financial planning profession, Dawn was listed in Financial Standard’s Power 50, which recognises the most influential financial advisers in Australia.
In recognising her work in lifting outcomes of women and young people in her community, she won the 2023 Industry Thought Leader of the Year Award, IFA Excellence Award 2023, 2019 Association of Financial Adviser’s (AFA) Female Excellence in Advice Award and IFA Excellence Award for Transformation of the Year 2022. She was also the recipient of the Great Advice Award (WA) in 2021.