Expat professional women at risk of poverty in retirement

Published:  6 Apr at 6 PM
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The gender gap doesn’t just apply to top wage levels but continues to ensure a great many expat professional women will be faced with poverty when they retire.

Recent media coverage of the salary gap between top-ranking women and their male counterparts misses out on one result – the differential guarantees women retirees will be living on far less than men with the same qualifications and experience who’ve worked in the same jobs. In fact, women are at far greater risk of being impoverished in retirement by a factor of between 38 and 40 per cent.

Funding retirement in an ever more expensive world, is hard enough, but the gender gap is now more like a gender chasm for working professional women, whether expatriates or home country based. On average, women living and working in the EU will retire with 40 per cent less than men; in the USA the figure is 30 per cent and in Australia it’s 47 per cent. Women who’ve worked all their lives to get to top salary levels aren’t protected from this difference – they’ll be 38 per cent poorer than men who’ve received the same salary.

The reason is the so-called pay gap, which takes into account career breaks to raise children, leaving work to accompany spouses on international reassignments, time off to look after elderly parents and, of course, the effect of the UK’s unfair divorce laws. One recent study by UBS showed professional women working at high levels earned $800,000 less during their working lives than did men in similar positions, most of whom were earning a good deal more in the first place due to the gender salary gap.

Another study by Swiss bank UBS used as an example a 50-year old woman earning an average wage but with no savings and 10 more years to go before she retired. The result was that she'd have had to save more than she earned to guarantee a relatively comfortable retirement, with the amount varying dependent on her location. If she lived in Hong Kong, she’d need to save 153 per cent of her salary per year, in Taiwan she’d need 157 per cent and even in Canada she’d need 62 per cent. Calculations included any state pension due to kick in when she retired.

On average, women work 25 per cent fewer years than do men, earn the same percentage less for the same job, don’t invest as much and, when they do, are more risk-adverse. In Britain, 66 per cent of retirees living in poverty are women, with their counterparts in the USA 80 per cent more likely than men to become impoverished. Perhaps the recent media focus on gender gap salaries in the entertainment sector should be broadened out to include all working women.
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