Why Indian working women need to plan retirement differently than men

Various reports point out that women are less financially prepared than men when it comes to retirement and aren’t well prepared to meet their retirement needs. Gender pay gap, family matters, life expectancy being some of the key reasons.

Hyderabad: India continues to stand out when retirement planning or preparedness is measured. While Indians want to retire early, and have life goals of doing something they are passionate about or pursue a philanthropic idea, there is a lacuna in getting their retirement goals done.

And this is felt even more when it comes to women, especially working women. Various reports point out that women are less financially prepared than men when it comes to retirement and aren’t well prepared to meet their retirement needs.

There are several reasons why women, and working women, should plan for their retirement, especially when we know that retirement is one of the top life goals of millennials. Gender pay gap, family matters, life expectancy being some of the key reasons. Here is my take on each of them and why women should plan more to get their retirement life goals done!

The financial gap

The pay gap between the two genders is real - and that means women are able to put less money aside for savings than men.

Aside from the gender wage gap, women are more likely to take time out of the workforce to care for children or elderly relatives. Even though more men are increasingly taking on the role of caregiver, in our country it remains predominantly a role taken on by women.

Such career breaks can seriously set back a woman’s retirement preparedness, especially if you are taking an early career break between the age of 35 and 45, which is when many working women are starting families and also hitting their highest annual earnings.

Even when such women rejoin the workforce, they lose out on years of salary gains or promotions and end up missing out on compounding interest over the course of their lives. Although the financial gap between men and women is narrowing, there’s still a lot of distance to close.

Putting away more money earlier in your career in market-linked products such as Unit Linked Insurance Plans (ULIPs) can help your savings grow even if you are not working for a while. Planning early for your life goals and making prudent investments is the key to protect your wealth, and more so for women.

Health and life expectancy

It is necessary to remember that men and women - biologically speaking - are two fundamentally different creatures. This means that healthcare and medical requirements have some major variations.

Various studies have found that women are more susceptible to certain forms of cancer and tend to develop other chronic issues such as arthritis and osteoporosis at a higher rate than men.

At the same time, women live longer than men. As per the 2011 census, there are 4.05 crore women who were 65 years and over, compared to only 3.6 crore men in that age group. Moreover, the average life span in India for women is 69.8 years, while for men it is 67.3 years.

As a result, the healthcare costs for women is likely to be substantially higher than that for men. A recent report has estimated that lifetime health care costs for a 65-year-old woman living to 87 years will be nearly 18% higher, on average, compared to men. Hence, the younger you are, the larger this healthcare cost differential becomes.

It is necessary to take these factors into consideration when planning your retirement. You must ensure that all the additional healthcare and day-to-day expenses are met comfortably, without having to compromise on the overall quality of life. In order to ensure maximum coverage and benefit, you can use various online calculators to estimate your retirement savings goals.

Family Goals

Whether it’s by natural destiny or social design, women more often than not take up the role of the caregiver - putting the needs of others above caring for themselves.

If you are a working professional or a home entrepreneur - single or married - it is more than likely that you are also juggling the unpaid role of family caretaker and making other financial sacrifices in your journey to achieve your life goals.

I believe that life goals see no gender and women should have equal benefits that empowers them to achieve their life goals.

To achieve your long-term life goals, like traveling the world, retiring rich and healthy, or sending your child to study abroad, you should start investing as early as possible.

In sum, by being financially proactive, you can have a smooth and fruitful retirement.

(Authored by Tarun Chugh, MD & CEO, Bajaj Allianz Life.)

(Disclaimer:The views and investment tips expressed above are solely of the author and not those of ETV Bharat or its management. ETV Bharat advises users to check with certified experts before taking any investment decisions.)