Gails Blog

One of my biggest bugaboos over the years has been the difference in the way men and women deal with money. Some of it boils down to personality (women want more information; men want to score big); some boils down to the differences in our incomes. And while the general consensus is that we’ve pretty much achieved parity, that’s a myth, which is why women MUST start taking better care of themselves financially.

While it may seem as if women are in the workforce as much as men (with breaks for maternity leave), according to Statistics Canada, Women In Canada 5th ed., women have worked for pay for only 75% of their potential years vs. 94% for men. Plus we earned only 71 cents for every dollar a dude earned. Why oh why, in the 21st century would the average salary for female full-time, full-year teachers be just $47,500 while male teachers earned $63,300?

Women also take their roles as caregivers seriously, with almost twice as many women as men are involved in caring for children and elderly relatives. Of course, in order to cope with this caregiving responsibility, we reduce our work hours, refuse promotions and retire early.

While it is true that more women are well-educated – and this should lead to high-paying, professional jobs – the sad reality is that people with a post-secondary education hold 38% cent of Mcjobs, and women hold 2/3 of these jobs. Monica Townson, in New Frontiers of Research on Retirement: New vulnerable groups, says that 40% of jobs held by women are considered to be non-standard (part-time, contract, temporary) with few, if any, benefits.

Most people see our Canada Pension Plan as being a universal benefit, but you might be surprised to learn that the average CPP pension for women in October of 2005 was$334, just 63% of that received by the average male. Since we work for less time and money, our CPP payments, which are based on earnings, are lower. In 2003, the average annual pre-tax income of women age 16 and over was $24,400 — 62% of the figure for men, who had an average income of $39,300 that year.

We hear a lot about the fact that employed women have workplace pension. In 2001, that was true for just under 40% of women, leaving over 60% of women in the workforce without a company pension. And as of 2006, fewer companies are offering pensions.

Sure, but her husband has a pension, so she’ll be fine, right? Give me a break. His pension may be okay while he’s alive but statistically she’s going to outlive him, and have to live on 60% of his benefit. Pension experts suggest this is 10 to 15% less than needed to maintain the same standard of living. And since most workplace pensions are not indexed for inflation, she’s going to lose an additional 2 to 3% in purchasing power per year. Over 15 or 20 years that can really add up.

The government pension at 65 is also woefully inadequate. In 2007, OAS was approximately $492/month. When combined with GIS, given for those with no other income, the amount increased to a whopping $1113. A roof and food? Really? On less than $1200 a month? Women’s average retirement income was approximately $1260/month or $15,120/year. (The After Tax Low Income Cut Off for a single in large urban centers is $17,219, according to the National Council of Welfare.)

Despite the fact that Canada is a country of immigrants, many who have not lived in Canada 40 years between the ages of 18 and 65 are not eligible for full OAS. After 10 years in Canada before 65, they qualify to receive only 1/40th of OAS benefits for each year of residency, even though they are Canadian citizens or Landed Immigrants. Hey, we may be immigrants, but we still have to eat!

The picture is clear: while the government is doing what it can, with more of us retiring, if we don’t take personal responsibility for our futures we’re going to have a crappy last twenty years. I’m not really into dumpster diving, so I’m saving. You should be too.