With most household and family responsibilities on their shoulders, women still fall behind when it comes to retiring comfortably.

Men and women retire differently- how and why?

They say men are from Mars and women from Venus; and apparently, this is true even when it comes to how each grapples with the issue of retirement. As always, say experts, they react differently, and Abhimanyu Sofat, co-founder of financial consultants Advisesure, puts it bluntly: “(Indian) women tend to lag behind”.

Children and family often take precedence over work for women, who as a result work fewer years than men. In fact, when it comes to retirement planning, women do not take it as seriously as men. Research shows that Indian women earned about 25% less than men; which makes it that much more important for women to think of retirement savings as a priority.


‘Women Lack Self-Belief’

Sofat reckons that if a man and a woman start working at the age of 25 years, retire at 60 as per law, have the same monthly expenses (of Rs 35,000), and assuming the inflation rate is a flat 6% over the 35-year period, then the woman would need to have a retirement corpus that was at least Rs. 55 lakhs more than the man. The reason- on an average, a woman’s life expectancy is at least three years more than a man’s. He says that financial knowledge is essential, and it is important that women increase their financial know-how. It can help them make correct investment choices, thus generating better returns on their investments.

But is this happening? Are women taking charge of their family's savings and investments? Apparently not, if one were to go by the observations of Dhirendra Kumar, the founder-CEO of investment research company Value Research. On International Women’s Day (March 8) in 2017, Kumar addressed the issue in an article headlined ‘Why don't women make investment decisions?’

He acknowledged that a lower pay at the workplace was about empowerment – or the lack of it. At the same time, he says his experience showed that even if there was no discrimination at work, on the personal front women were quite happy to let their men take charge of the family's savings and investments. Apart from women who work in the finance industry, investing is simply something women do not do. “This is painfully clear in the emails that we get at Value Research asking for investment advice,” he adds.

Kumar says it is primarily men who write in to seek financial advice, either for themselves or for their spouses; but there are rarely any women writing in for themselves, and almost never for their families. The “obvious” answer to the question why this is so, he says, is in the average home, it is usually the men managing investments and finances, while the women oversee the basic expenses, such as groceries, children’s school fees and sundry payments. His argument can be supported by pointing to commercials relating to financial products, which often paint the same picture- the man of the house pondering over the family’s financial security, pitching for this or that investment scheme, while the women take a call on the brand of the next TV set.  

So, why are women hesitant when it comes to managing money? In his opinion, they lack self-belief when it comes to finances. Even amongst the few women who write in for financial advice, the one thing that is clear is that they lack confidence. He says, “When women write in to ask for savings advice, the language is basically along the lines of 'This is probably a stupid question, but...'. You see the problem here? There must be many more who thought of asking something but didn't want to be thought of as stupid so ended up not writing in. Meanwhile, men blithely write in asking questions and learning from the advice, regardless of their level of stupidity.”


Number of citizens over the age of 60 (per 1000 people) is increasing across Indian states


*Census 2011 data


Facing Retirement: Indians and Americans

However, to be fair to women, does this mean they are not financially ready to retire? Perhaps not; it could merely mean they are not aggressive investors, but that they have their own plans for retirement. They have their pensions to be self-sufficient, and as Sofat says, they are happy spending time with their grandchildren.


In this, Indian women are quite like their American counterparts, show retirement trends surveyed in the US. American webzine ‘US News & World Report’, an online publication known for publishing survey findings, some time ago analysed how men and women in the country approached retirement. According to it, the “retirement differences” between men and women start much before they have to retire; while men are typically more aggressive with investments, women are more conservative. Basically, this is the same conclusion that Sofat and Kumar came to about Indian women vis-a-vis Indian men.

To underscore its contention, the webzine quoted from a 2014 survey report from finance firm BlackRock, saying that of the women surveyed, 55% revealed they were unwilling to take risks with their money, in comparison to 47% of men. Similarly, while around 33% men said that they were comfortable with investing in the stock market, only 21% of women agreed with the same. However, based on feedback from experts, it also said that this should not necessarily be seen as a negative trait, but merely that women may be more cautious about investments, and that their priorities are different.

When it comes to making the actual transition to a retired life, American women are once again found to be like Indian women –in planning how they would spend their retired years differently. ‘US News & World Report’ says that as per a survey by the Field Consulting group, American women are more likely to spend time with their family and friends than men. It also reveals that 43% of women report taking care of a family member in retirement, a number that is significantly higher than the 26% of men who say the same. Financial planner Nancy Coutu told the webzine that while women think about their children’s well-being, men tend to think about hanging out at the hardware store or golfing, after retirement.

Indians Retirement Ready

At the same time, it appears that both Indian men and women are more prepared for retirement than the global average. According to the 2017 Retirement Readiness Report by Aegon (one of the world’s leading financial services organizations, providing life insurance, pensions and asset management), India has the highest level of “retirement readiness” among the 15 countries surveyed, including the US, UK, Germany, Japan and China.  

In fact, when asked how confident they are about being able to fully retire with a lifestyle they consider comfortable, 57% of the Indians surveyed said they were “very/ extremely” confident of doing so. This is probably because 31% of Indian respondents said that they have a written retirement plan to help them achieve financial stability; putting India just behind America (32%).  

Although the 2017 report does not show specific data for women, in Aegon’s 2016 retirement readiness report, 34% of female respondents said they had a written plan; as high as 50% said they had a plan but not written, while only 14% said they had no plans. The remaining 2% was undecided. (Aegon says a written retirement strategy is the “outcome of a process where future retirees have taken the time to consider what their post-working life can look like and how they can fund it”.) On the bright side, however, 61% of Indian women say that they make it a priority to save for retirement, which is higher than the other countries surveyed. 

What to do

The overall picture that emerges is that even if Indian women are mentally prepared for retirement, more of than not they are unable – or unwilling – to grasp the significance of having a nest egg of their own for their twilight years. Thus, it is imperative that they start investing a sizeable portion of their income, right from the time they begin working; this will enable them to build a substantial retirement corpus. An easy way to do this is by using a retirement calculator, which takes into account current earnings, expenses and inflation. 

Women do not necessarily have to be experts in equity markets; simply investing in the good old dedicated pension plan will also pay off in time. Today, there are numerous options available to women such as retirement plans and life insurance plans where monthly premiums are all they must pay to build up a corpus for their future. Of course, there are also financial advisors willing to help with such things. But for those who want to make their own decisions, there are numerous ways to become financially literate and create their own saving and investment plans on their own terms.