According to a recent survey, a large number of women are facing financial problems in their retirement years. Often, they are facing financial troubles even before reaching their retirement age. Read on to know about some reasons why women go through financial problems in life.
Reasons why women face financial problems
Here are the 5 reasons why women face financial problems:
1. Lack of financial knowledge: Studies show that majority of women don't have good knowledge on finances. They don't have a thorough knowledge on stocks, bonds, mutual funds, foreign currencies, etc. Men understand these things better than women. As women don't understand finance much, so they prefer to not invest in shares and bonds. Due to this reason, they lose the chance of making huge amount of money.
2. Women make less money than men: It is a fact that women make less money than men. They make around one-third of what men earn during their working lives. In short, women make small contributions to the pension schemes and Social Security plans. They have less money to save for their retirement years. That is why women get into financial problems in their later years.
3. Family obligations: Several women are compelled to resign from their jobs or take early retirement due to family obligations. They leave jobs either to look after their children or family members. As they have no income, they tend to exhaust their savings fast. Their financial stability is hampered and have less or no money for contributing to the retirements plans.
4. Inadequate pension: It has been seen that around 29% women receive retirement plan benefits or employer pension. This figure is drastically less as compared to that of the men. This is mainly because women have different work pattern and have less scope to contribute to the retirement plans. They are mostly working part-time or leave jobs early.
5. Live for a long period of time: A recent study has shown that the women live minimum 3 years more than men. This implies that they should save more for their retirement years which happens rarely.
Finally, women are not made aware about the importance of managing finances on their own from childhood as compared to that of the men. Personal finance experts are of the opinion that men are focused on markets and investments from an early age whereas women are more interested in nurturing subjects from childhood.