Breaks in her career are bound to have a significant impact on a woman's earnings capacity and her ability to save and plan for retirement. Picture: 123RF/IAKOV FILIMONOV
Breaks in her career are bound to have a significant impact on a woman's earnings capacity and her ability to save and plan for retirement. Picture: 123RF/IAKOV FILIMONOV

This article focuses on estate planning for women and how such planning differs from planning for men. The basic principles of estate planning are the same for everyone, but there are several factors that are unique to women that have an impact on such planning. 

Life expectancy

Evidence indicates that women live longer than men, which is backed up by mortality tables used by actuaries to calculate life expectancy, and statistics. In terms of a 2018 Statistics SA report, a woman’s life expectancy is 71.5 years compared to a man’s 64.5 years. Women, therefore, on average need to plan for a longer timeframe.

Gender wage gap

It is a reality that women, on average, still earn less than men; research done recently shows that women worldwide earn 79 US cents for each $1 men earn. In dollar terms, that means that a woman will earn an estimated $530,000 less over her lifetime, which reduces the amount of money she can invest for retirement.

In SA, the wage gap is even higher; a global wage report indicates that a woman earns only 72c for every R1 earned by a man. It should be noted that the wage gap reduces significantly when considering earnings on a same-job, same-qualification level, but for most of the female population the gap remains significant. 

Family responsibility

Women generally need to plan for a break(s) in their career if they have children. Many women choose to give up their jobs permanently to raise a family, which usually leaves them financially dependent on their spouse or partner. Regardless of the choice women make in this regard, it is bound to have a significant impact on their earnings capacity and accounts, to some extent, for the gender wage gap itself. It also affects their ability to save and plan for retirement.

Gender investment gap

Research shows that women typically save more of their disposable income than men, but they tend to invest less of it, leaving a lot of their money in cash or low-yield savings accounts. While this gives them easy access to cash, it has a negative impact on their long-term financial planning.

Roles fulfilled

Women fulfil many roles in the family dynamic, for example as caregiver, taxi driver (the so-called “mom’s taxi”), cook, cleaner and healthcare provider, among others. These roles are often not taken into consideration when estate planning is done.

No thought is given to how these tasks will be fulfilled and, more importantly, how they will be funded if she dies first. The reality is that someone will probably have to be paid to perform these tasks, which could lead to financial strain on the family. 

Financial well-being and estate planning cover a wide range of aspects and the abovementioned factors illustrate the importance of a holistic estate plan. It is very important to seek advice to ensure financial planning is taken care of. It is also crucial to seek advice from fiduciary experts to ensure you receive comprehensive estate planning.

• Williams is a member of the Fiduciary Institute of Southern Africa (Fisa) and a fiduciary specialist with Geneva Management Group in Mauritius.