New legislation was introduced on Wednesday, January 30 that would require employers to be more transparent about what they pay their employees. The bill would also put the onus on employers to justify discrepancies in pay based on business or performance reasons and it would prohibit retribution against employees who ask what their peers are making.
An analysis of US Census Bureau data was also recently released by the National Partnership for Women & Families. It showed the top ten districts in the country with the greatest pay discrepancy between men and women.
More than showing me the unpleasant truth that a district in my state ranked number 3 in gender pay discrepancy, these news items made me think about how women need to plan differently for retirement than men do.
There are several reasons for this and pay discrepancy is a significant factor. If a woman works the same number of years and gets paid less for comparable work, there’s a retirement income planning gap that has to be made up.
Women feel a double effect in this case. If you’re not making as much as a man does doing the same job, then you have less income to begin with. That means you also have less money to save for retirement.
Women also are often the ones caring for aging parents—on either side of the family. Sandwiched between caring for aging parents and also for children in their late teens or college age years can keep women from thinking about their own need to plan for retirement income.
Most women are also quite likely to outlive their spouses or partners. That means they will spend on average even more years in retirement than their spouses. Whether or not the Paycheck Fairness Act passes, many women are already behind in their retirement income planning. They may not be taking full advantage of employer plan opportunities. It could be as simple as not having the time to sit down and talk about it.
Even if a spouse has a solid retirement plan in place, women need to know how that plan will affect them as well as how Social Security, their own retirement savings, and other factors may impact them later in life.
Sitting down for a conversation about your future needs is a good place to start. That conversation can happen with your spouse, your financial advisor, or both. The important thing is to make sure you are taking care of your own needs as well as the needs of your family and others.
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