According to an article by The Straits Times, women are less prepared for retirement and are likely to depend on children and family to provide for their retirement needs. This is because of numerous reasons; a common one was that they would spend most of their salary on children’s educational expenses. These findings show that there is a lack of financial preparedness among women, and this is a key concern that should be looked into. It is important to provide more awareness and education to women on how a proper retirement planning can prove to be beneficial for them later in life when they are not earning.
What is a retirement insurance plan?
A retirement insurance plan is one that pays you a monthly income in your senior years. You can choose the age from which you wish to start receiving these payments. Similar to savings insurance plans, you pay premiums towards your retirement insurance plan now and receive the benefits when the plan’s chosen payout period begins. The monthly payout that you receive can help supplement your finances independently.
Benefits of retirement savings plan:
Let’s read on to understand why getting a retirement insurance plan can help women better prepare for their future life:
Lower pay and fewer working years
According to an article by Human Resources Director (HRD), women in Singapore earn about 6% less than their male colleagues doing the same work. This shows that women will potentially have lesser capital to save for their retirement. Apart from this, working women may often take a break from their work to care for their children or elderly parents. This may further cuts down on their total number of working years leaving them with lower pension than men. A retirement insurance plan or a savings insurance plan can aid these women in accumulating a certain amount during their working period to finance the expenses during their retirement years.
Economical inactivity of women:
As per a study conducted by Department of Economics, National University of Singapore in June 2008, out of the 88% of economically inactive residents between the ages of 25 to 54 112,799 or 71% of those aged 55 to 64 were females. This is a reflection of women’s traditional role being the primary caregivers and homemakers. Other reasons for economic inactivity among older females aged 55 to 64 include poor health, disability or old age (14%) and retirement 118 (13%). With more years of economically inactivity, it is even more important for women to start retirement planning early with retirement insurance plans so that they can lead a comfortable life post-retirement.
Women live longer
According to the Department of Statistics Singapore, the life expectancy at birth is 86.1 for and 81.5 for men. This shows that women can expect to spend more years in retirement than men. However, they need to be prepared for the possibility of spending more years in ill health. Apart from having a good health insurance plan to take care of expensive healthcare cost, women should purchase a retirement insurance plan so that they can have enough savings or passive income to support the longer retirement years.