It may surprise some of you, but women are financially worse off than men in retirement. According to the Australian Bureau of Statistics (ABS), women usually retire before men do. The Association of Superannuation Funds of Australia (ASFA) have found that women often have 39% less in superannuation retirement savings due in part to the 14% average pay gap during their working lives, outlined by the Workplace Gender Equality Agency (WGEA), and fragmented working lives while they take time off to care for children and family. Most Australians are living for longer, but women still tend to outlive men, according to the ABS. Moreover, the Sydney Morning Herald has found that there has been increase in divorce amongst retirement age. This has a slight influence on the Lord Mayor’s Charitable Foundation findings, that in 2011, 34% of single Australian women aged 60 and older living in poverty. Each of these factors have significant influences on how women spend their retirement.
Marital status overall has a big impact too, for both men and women. According to research by the Commonwealth Bank of Australia, just 31% of single men and 22% of single women can expect a comfortable retirement. How much do you need for a comfortable retirement? The Association of Superannuation Funds of Australia Ltd (ASFA) says that the average Australian single at the age of 65 will need around $27,425 per year for a modest lifestyle, and $42,953 a year for a comfortable lifestyle. Couples have it a little easier, but will still need $39,442 each year for a modest lifestyle, and $60,604 a year for a more comfortable lifestyle. Whilst these cost do go down slightly as you get older, considering that most Australians will be retired for more than 25 years, money really does matter.
Men and women spend their time differently
Setting aside the question of money, there are other differences between how happy men and women are in retirement.
Generally speaking, women may be more easily able to adapt to life without work. Fragmented work patterns, due to taking time out to raise children or look after elderly parents can build resilience amongst women who go through significant lifestyle changes.
According to the Australian Bureau of Statistics, women working in the non-public sector take 95% of paid parental leave, whilst men tend not to experience an extended period off work, and so their move into retirement can feel like a more dramatic change that requires them to learn new social skills.
Retirement may seem like a long-awaited break from working life, but it can also leave retirees with a sense of loss. Working life offers structure, collegiality, purposefulness, self-identity, intellectual stimulation and a sense of belonging that are all important for happiness and health. To have a happy retirement, it’s important to look at ways to build those same features into everyday life once the rigours of work have fallen away.
According to a report by HSBC, here are the top 10 favourite pastimes for retirees, based on a recent survey of more than 1,000 retirees from the UK:
- Spending more time with friends and family
- Frequent holidays
- Home improvements/gardening
- Home improvements/gardening
- Extensive travel
- Charity/voluntary work
- Buying a new car/other expensive item
- Learning a new skill/hobby
- Living abroad
- Learning a foreign language
Social isolation is one of the biggest challenges for retirees, with studies by the Australian Institute of Family Studies showing that men are at greater risk than women. One reason is that women tend to have greater contact with friends and family, with a study by the University of Melbourne showing that women are more likely to look after grandchildren. A different study by University of Melbourne has also shown that this activity helps to halt the effects of ageing on an older relative’s brains and improve cognitive function.
The issue of isolation became such a prominent issue, that the Men’s Sheds organisation was set up in the 1980s. There are now over 1,000 Men’s Sheds located in Australia, with thousands of active members. More Men’s Sheds can be found in the United Kingdom, United States, Finland, New Zealand and Greece. Not all Men’s Sheds are the same, and not all the activities take place inside sheds. But they can provide the sense of community, purpose and belonging for men who find themselves missing those features of everyday work life.
There’s no right way to do retirement – it can be the start of a new adventure, or to be spontaneous and live the life you imagined. For some, it can be such a big change that they do it more than once. In fact, according to another study by the University of Melbourne, as many as 26.7% retired men and women between 45 and 59 return to the workforce. The most important thing is to remember it’s your retirement, to spend as you wish – so long as you have a plan in place.
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