Why do South African women need to be proactive about their financial planning?

Why do South African women need to be proactive about their financial planning?

approaching retirement

Until recently, the financial services industry merely noted “women were responsible for directing a large portion of the monthly household expenditure, such as grocery shopping, clothing and school bills”.

However it’s also time to acknowledge that South African society has shifted. The traditional married-with-kids, mom-stays-home model is the exception these days — there are more professional women than ever, and more women who are breadwinners; whether single or partnered, with and without children.

Lifespans are lengthening and women live longer (on average) than men

In addition, the majority of our cumulative lifetime medical expenses tend to occur in the last years of life, and in South Africa with our privatised health system, women need larger retirement savings for adequate financial security.

Despite this, the local financial services industry still tends to cater to men and financial media tends to be written in a male-focussed vein.

No surprise then, when a study showed that while women tend to be as confident as men in completing most financial tasks, they were less confident when it came to investing their money. Many women interviewed said their biggest financial regret was not investing more.

The ill-effects of under-investment are compounded by other factors

Research findings show that on average, a woman spends 44% of her adult life outside of the workforce, whether to care for children, an ailing parent or an ill spouse (whereas the average man is only removed for 28%). The financial effect of such career interruptions accumulates over time because of the power of compounding, so when it comes to their lifelong financial wellbeing, women are at a distinct disadvantage.

It would seem that the odds are stacked against South African women investing successfully for their retirement, but forewarned is forearmed. Knowing these facts, women can take responsibility for their own long-term financial wellbeing from the very beginning of their careers.

Take control of your financial future by

  • talking with friends, mentors, and professionals about money matters, saving and investing
  • creating a concrete financial plan to maximise your chances of achieving the financial outcomes you want
  • investing from early on in your career so that your investments have time to grow
  • saving and planning for career interruptions
  • making adjustments along the way as necessary

Morné Bezuidenhout       BCom LLB CFP®

At Netto, our Certified Financial Planner professionals (CFP) offer an objective sounding board for financial decision-making. Co-creating a financial plan and reviewing it each year makes the results of your retirement planning efforts tangible, allowing you to celebrate, tweak and course-correct as necessary, depending on what happens as your life unfolds.

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