If you’re a woman in the workforce, you’ve probably experienced everything from small slights at the office to more overt discrimination.
But what probably frustrates you the most is what’s being deposited in your bank account.
According to Pew Research Center, “The gender gap in pay has remained relatively stable in the United States over the past 20 years or so. In 2022, women earned an average of 82% of what men earned, according to a new Pew Research Center analysis of median hourly earnings of both full- and part-time workers. These results are similar to where the pay gap stood in 2002, when women earned 80% as much as men.”
It's Been a Long Road
The Equal Pay Act of 1963 aimed to end wage discrimination on the basis of sex, but we still have a long way to go. The differences in salaries have been attributed to various factors, including career choices, education, discrimination, and family responsibilities. Although there are many factors responsible for the gender pay gap, the sad truth is that women often earn less than men and, over time, this discrepancy can have a significant impact on women’s quality of life.
“Women who are 65 or older face higher levels of poverty than men, according to data from the United Nations. This gap can be attributed to the culmination of lower salaries, more time off to care for loved ones and higher amounts of debt over the years. ‘These factors can result in lower Social Security benefits and retirement savings for women, which can make it harder for them to make ends meet in retirement,’ says Jonathan H. Westover, chair of the organizational leadership department at Utah Valley University.” (US News & World Report)
It's Time to be Proactive
One way women can possibly make up for the gender pay gap is through smart investment decisions. Investing your money wisely can give you the opportunity to grow your wealth, save for retirement, and hopefully, override the pay gap.
To be better investors, women should also equip themselves with knowledge and skills. This means educating themselves about personal finance and understanding different investment products. It’s important to diversify your portfolio and plan your asset allocation and investment strategies with a long-term perspective.
In a 2022 T. Rowe Price Retirement Savings and Spending Study, they found the following:
- Women were contributing less annually to their workplace retirement accounts and had significantly lower retirement account balances. Notably, the median 401(k) account balance for women was 65% lower than for men.
- There were no overall gaps in access to retirement plans between men and women.
This means that the opportunity to save for the future is there, but women aren’t often taking advantage of it.
That makes sense if you think about it. We earn less and are trying to maintain a certain lifestyle. This might leave less to contribute toward retirement.
This is where working with a financial advisor can help women take control of their finances.
While you might think that the sole job of a financial planner is to tell you that you can’t have any fun or spend money now because you need to save for the future, that’s not the case. Our job is to help you make wise decisions now and for the future – all while allowing you to live in the present.
This support allows you to take control of your finances.
Another important factor to consider is working with a FEMALE financial advisor; having a financial planner who understands and appreciates the unique challenges and goals faced by women can be a valuable asset. Also, a female financial advisor can provide an environment of empowerment and encouragement, which can help you invest with confidence.
The gender pay gap has always been an issue, but women can take control of their finances and invest strategically to overcome it. With education, knowledge, and guidance from a trusted financial planner, women can start making smart investment decisions and grow their wealth over time.
Overall, take an active role in your finances - even if your husband pays the bills and manages your investments. Take the time to understand your accounts, the cash flow for your family, what’s coming in and going out, and what you’re both contributing to your financial future as well as short-term “fun” goals. This can lead to higher confidence in yourself and more successful outcomes.
“The best thing that women can do to bridge the gap between themselves and their male counterparts is to take an active role in their finances if they haven’t already.”