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Start early

15.06.2015
Women and Retirement Provision: Part 1

Financial independence is very important to women. Most of them earn their own money and provide for old age on their own. An early start and perseverance are crucial when building up wealth. This is especially true for women. Because they have to struggle with special challenges.

When Bianca Kindler received women for a conversation earlier, the financial advisor usually had a haunting message: Finally do something for your private retirement provision! In the meantime, reports the managing director of the financial advisory service das finanzkontor, she no longer has to remind her. Many customers internalized this. “The awareness of having to do something for old age has increased significantly,” says Kindler.

Their assessment shows how women's self-confidence has grown. Financial independence is now as important to them as it is to men, as the 2013 “Generation Mitte” study showed. That is why they also take private precautions. Above all, the basis is created by one's own earnings. Never before have so many women been employed in Germany as they are today, and the proportion of working mothers has never been so high. For many young women in particular, a job is part of a fulfilled life.

It is more difficult for women to provide for old age

Nevertheless, it is more difficult for them to secure their retirement financially. They have a longer life expectancy than men and consequently have to live longer with their savings. At the same time, during their working lives they acquire lower entitlements from the statutory pension, which is the most important source of income in old age. Because on average they earn less than men, they interrupt their jobs more often or work shortened. Because it is mostly women who master the difficult balancing act between work and family. "When it comes to who looks after the children or who takes care of the parents, the woman often lags behind," says Constanze Hintze, managing director of the financial consultancy Svea Kuschel + Kolleginnen in Munich. While 80 percent of the fathers work with a child under the age of three, only just under a third of the mothers work.

Men are not retirement plans

Other old role models, however, no longer apply, such as that of the marriage pension model. "Men are not a pension plan," says Elke Weiskittel, managing director of the insurance and financial consultancy FrauenFinanzService in Hanover. Their employment histories are also increasingly marked by breaks. Couples marry much later today anyway, and almost 40 percent of marriages break up again within 25 years. Last but not least, the maintenance law, which was changed in 2008, ensures that marriage is no longer a financial pillow. This is another reason why more and more women are making private provision. 72 percent of women who are subject to social security contributions now have a Riester pension or a company pension scheme. But that also means that almost 30 percent still do not put anything aside for old age. According to Hintze, some still have reservations about dealing with the issue of money. And - this is also confirmed by surveys: Many people think about their retirement provision relatively late. They are wasting valuable time.

Early start is crucial

Because an early start is an important success factor for long-term wealth accumulation - this is especially true for people who earn little or who expect loss of earnings in the course of their lives. “I advise women to start their retirement provision as early as possible,” says Weiskittel. Even if the financial scope is limited, retirement provision should not be forgotten. "Women should save even with small contributions and be prepared for the fact that they have to do something for their entire life," says Weiskittel. This also applies to the phases in which women take time off work because of raising children. “Unfortunately, old-age provision is often cut when the children are around. That is fatal, ”says Weiskittel. Women who work part-time have to accept losses in their statutory pensions or company pension schemes anyway. “That is why private pension provision should be maintained as much as possible,” Kindler appeals.

Partner should participate in retirement provision

Also with the support of the partner. “The mother's part-time work because of childcare is a joint project. And in the same way, pension provision for women should be understood as a joint project, ”argues Hintze. Elke Weiskittel sees it similarly: "The man's earnings should be viewed as family income, part of which is there for the protection of the woman and not just for the next car." leads to arguments in many relationships. Nevertheless, she recommends women to fight offensively for their interests. Financial expert Hintze, however, also sees a duty to women: "My appeal is not to extend the part-time phase for too long." Today, only 20 percent of mothers switch from part-time to full-time in the long term. 80 percent, on the other hand, limit themselves - voluntarily or involuntarily - to part-time work and accordingly have poorer prerequisites for making provisions for old age.

Text: Karsten Röbisch

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