6 Reasons Why Women Need To Save More Than Men

  Author: Jai Prakash

In India, in the recent years, there has been renewed focus on women’s education and health. This now needs to get supplemented with financial empowerment not just in terms of job opportunities but also how women manage their money. In this context, an important need for financial empowerment is the women’s need for healthy amount of savings. It may come as a surprise to many, but women need to save much more than men. Just in case you are surprised, here are six reasons why this needs to be ensured.   

Live longer than men According to a report by the World Health Organisation in 2015, a typical Indian woman has a life expectancy of about 70 years. This is three years more than the Indian male. Since female spouses in India are typically five years younger than their male spouses, this means financial provisions have to made for a long period of retirement. Further, women in urban areas with better access to health facilities and those in families associated with the organised workforce, tend to live even longer, often well into their 80s, with male spouses typically living till their late 70s. This makes it even more important that women have enough savings either through their own earnings or with provisions made by their male spouses, if they are non-earning spouses.

 More career disruptions Unlike men, women face many career disruptions. This could be due to relocation after marriage, childbirth or taking up full-time family responsibilities. This means that they do not enjoy stability of income. This does make an impact on the amount they save regularly or the amount they end up saving for any major need like retirement.

Career switches Due to major personal developments such as marriage or birth of a child, women often find the need to achieve work-life balance more than ever before. Often, this means taking up work which may not be as rewarding as before. This typically impacts the amount women end up saving.

Lower pay than men It is a well-documented fact that in many workplaces across the globe, women face pay discrimination. For the same work or job profile, it is not surprising to see women being paid less. Consequently, this again becomes a reason why women need to save more to meet the same need as a male.

Inclination for low risk investments Given the instability related to income that women face, many of them prefer stable and low-risk investments such as fixed deposits (FD). Unfortunately, such investments don’t grow as briskly when compared to inflation as higher risk, higher reward investments such as equities and equity mutual funds. The latter help investors save enough to take care of ever rising costs. Again, this makes it important for women to save more in order to have enough to stay ahead of inflation. 

 Financial shock from loss or spouse or divorce This is especially important if women are financially dependent on males in a very significant way. If separate and ample financial provisions have not been made, affected women can be especially vulnerable. This is more so in case of old women who would need their medical expenses to be covered.