She has the physical stamina, mental tenacity and the burning passion for getting things done. Whether it's at work, at home, or with her hobbies and causes, she focuses on the goal and task at hand. She is you or someone you know, and every successful modern woman is nothing short of a superhero.
But while she is as smart and works as hard as her male counterparts, the grim reality is that women earn way less. In 2017, the National University of Singapore found out that the gender pay gap — or the average difference between a man and woman's remuneration — among directors in SGX-listed companies is at 43.2%. The study also reveals that female directors earn just 56.8% of what male directors get.
This astonishing difference impacts every woman significantly because it will be harder for them to prepare for retirement.
Why women need to be smarter with their money
Women outlive men. Numerous studies have shown that women have longer life spans. Life expectancy for males in Singapore is at 80, and for women, it is at 85. With more years ahead for them, it only implies that women in Singapore need a healthy piggy bank set aside for two decades after she leaves the workforce.
Female illness. Women tend to fall into critical illnesses (breast/cervical cancer) and musculoskeletal problems which require additional insurance coverage.
Career breaks. In most homes, women are in-charge of looking after their children and aging parents. Some leave the workforce or scale back on their careers to focus on their caregiving duties.
Less CPF savings. CPF contributions are based on wages. With the current gender gap, it follows that women in Singapore have lesser CPF than men. Homemakers and those who left their careers for whatever reason are also at a disadvantage, so relying on CPF alone for retirement is risky.
Divorce rates. According to Singstat's Statistics on Marriages and Divorces Reference Year 2016, divorce rates continue to rise, up by 1.4% the year before. Contrary to popular belief, estranged wives do not automatically get half of their husband's wealth or get half of the assets. It's also possible to get absolutely nothing.
How women can take charge of their financial future
Chart your course, now. Before filling the closet with stuff you love, it is crucial to take a comprehensive look at where your money must go. It's called a financial plan.
The sound of it seems complex and daunting. But Carl Richards, author of "The One Page Financial Plan" suggests that a guess or a projection is already good enough. Anyone who has dived into the process of financial planning has also come out more aware of why they want what they want and has worked on a framework to reach these goals.
There is also no recommended adult age for financial planning. The earlier you set things in motion, the more years you can use to your advantage. Simply put, the right timing is always NOW.
Top up your CPF account. The CPF Board allows husbands to transfer their CPF savings to their wives' accounts after they set aside their Basic Retirement sum. You can also use cash to make top-ups. If your husband or siblings decide to top-up your CPF accounts, they could enjoy tax relief under certain conditions.
Set aside savings regularly. You have heard the adage that it's not how much you earn, but it's how much you save. The 70-20-10 is a good rule to follow so you can pump up your savings. Divide your income this way:
a) 70% for living expenses (rent, food, clothing)
b) 20% for savings:
10% for retirement
5% for emergencies (repairs, medical expenses, unemployment)
5% for specific goals
c) 10% for debt
Now that you have budgeted for what you need, you must also keep track of your spending. By doing so, you can identify how to adjust the basic formula to suit your needs.
Grow your money. Singaporean women lack confidence in investing and have a lower risk appetite, according to a study conducted by investment management company, BlackRock. In their survey involving 1000 Singaporeans, 37% of women feel that investing is for them compared to 54% of men. And 38% of women say they are willing to take on higher risks for higher returns, compared to 54% of men.The ability to invest is holding women back, and the best fix is to gain financial literacy. From mutual funds to equities and stock markets, the trick is understanding how these various forms of investments work.
Insure yourself. Death and illnesses will surely come, so adequately prepare for it by protecting yourself. Talk to your insurer about your current coverage, if early stages of cancer are covered and if female surgeries are included.