SA women need financial self-defence

While you're arming yourself with pepper spray and researching boxing classes think about arming yourself with a budget learning how to invest for long term growth.

Mica Townsend, Business Development Manager at 10X Investments, said women needed to empower themselves and take charge of not just their physical safety. “They also need to empower themselves in terms of their financial security,” she said. “Financial independence is one of the key building blocks of gender equality.”

10X Investments’ second annual Retirement Reality Report (RRR19), released days before the latest crime stats, found that women “need more [because they live longer on average], have less and reject the best chance they have of closing the gap”. The report found that women had fallen further behind men in the past year, with 72% of women (up from 64% in 2018) either not having a retirement plan at all, or only a vague one, compared with 63% of men.

Townsend said: “Even if we are not talking about extreme cases, for example where a woman stays in an abusive relationship because she doesn’t have the money to leave, financial security is very empowering and usually alters the balance of power in a relationship.” 

Related: How pension planning helped me end the cycle of abuse

She added: “Moreover, it has been shown time and again that financially empowered women provide a greater benefit to the economy and the country as a whole.”

According to StatsSA, women in South Africa earn almost a quarter less (23%) than their male counterparts, a disparity that is often exacerbated when women’s careers are interrupted during pregnancy and the raising of children.

Townsend said that although it was a complex and multi-layered topic, there was a correlation between the gender pay gap and poor retirement outcomes for women, “with key empowerment issues such as these being mutually reinforcing”.

But, she adds, there are basic steps that women can take to avoid being trapped in a vicious cycle and falling further and further behind men.

Step number one for women is to accept responsibility for making sure there is a reasonable plan that ensures they are properly provided for in the future.

Townsend says: “It is each individual’s responsibility. Even if you are in a stable partnership you should engage with the essentials of retirement planning.

“Besides taking responsibility for yourself in your old age, what happens in the case of the death of your partner? What about the possibility of divorce?”

She adds that there are many eventualities that can’t necessarily be predicted, “but the first line of defence is education and to have a financial back-up plan”.

“This also has a ripple effect, where financially empowered individuals, especially women, share this knowledge with their families and friends. The earlier this knowledge is embedded, the bigger effect it has and the more positive and wide-reaching the final outcomes.”

The RRR19 showed how big an issue financial insecurity is among South African women. The proportion of women who felt they were “doing badly financially” increased from 9% to 16% in the last year, with a total of 75% of female respondents believing they were doing badly, or feeling unsure about their financial predicament.

Townsend recommends that women start by educating themselves. “There is a wealth of information online these days. Many sites also have free, easy-to-use planning tools online, such as 10X Investments’ retirement savings calculator, to help individuals to set goals and work out a plan to achieve them.

“Saving for retirement is not complicated. The basic principles are simple. One step at a time. Start by making a plan; you can always build on it from there,” says Townsend.

“Having a retirement plan is very reassuring,” she says. “The same goes for knowing your that your financial future is secure.”

More information and the full Retirement Reality Report:

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