Simply put

Women lag behind in financial planning

By Brenda Spiering,

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If you’re a woman worried you’re not saving enough for retirement, you’re not alone. Here’s what to do about it.

Women lag behind in financial planningAccording to Statistics Canada, women lag behind men when it comes to planning for their retirement. The median RRSP contribution overall was $2,830 in 2011. While men contributed $3,220 on average, women only contributed $2,240. This means that although women made up almost half of all RRSP contributors (47%), their share of the overall contribution was significantly smaller (39%).

There are lots of potential reasons for this discrepancy. For example, women earn less salary. In 2008, the average salary for women was $30,100, and for men, $47,000. Women also often put their families’ needs ahead of their own. But women, on average, live longer than men: In 2009, the life expectancy for women was 83.3 years, while for men it was 78.8. This means most women need to plan for a longer retirement than men do. But they’re expecting to have less money saved.

According to the 2014 Sun Life Financial Canadian UnretirementTM Index, men plan to have just over $450,000 saved, but women are only expecting to have $385,000 put away, on average. Also, only 38% of women said they knew enough about financial matters to be able to make a plan for their retirement, versus 53% of men surveyed.

What can you do as a woman to get your finances on track?

  1. Start saving right away. The sooner you start saving, the more opportunity your investments will have for long-term growth, increasing your chances of building a substantial nest egg.
  2. Open an automatic savings plan. Set up an automatic savings plan or payroll deduction plan to contribute to a company pension plan or Registered Retirement Savings Plan (RRSP). Instead of only contributing at the annual RRSP deadline, you’ll be investing your money sooner, giving it more time to grow. And the funds inside your RRSP are tax-sheltered, so you don’t have to pay tax on the funds until you withdraw the money — presumably after you retire and your taxable income (and the percentage you pay in income tax) is lower than it is today.
  3. Max out your RRSP. Look for your RRSP contribution room on the Notice of Assessment you receive from the Canada Revenue Agency after you file your tax return. Unused room gets carried forward each year, so if you haven’t contributed as much as you were entitled to in years past, you can make it up now. You may want to consider an RRSP catch-up loan to help you maximize your contributions. But only borrow an amount you’re sure you’ll be able to pay back within a short period of time, such as the amount of your expected tax refund.
  4. Create a plan. Meeting with an advisor can help you create a financial plan to meet your own personal retirement savings goals. Plus, an advisor can help you choose investments based on the type of investor you are — low-risk, medium-risk or high-risk — so you can create a portfolio that both reflects and maintains your investment comfort level.

Women today are living longer and healthier lives than ever before. Having a personal retirement savings plan can also help ensure you enjoy a sound financial future.

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Apr 21: Best from the blogosphere | Save with SPP on

[…] advice available to Canadians, Brighter Life editor Brenda Spierling reports on Brighter Life that Women lag behind in financial planning. Does this sound familiar? She suggests that you create a financial plan and open an automatic […]

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