Taking care of aging parents. Being a stay-at-home mom. Putting a career on hold. This is what nearly seven in 10 (69%) Canadian women have been up to, according to a CIBC study released today.
The study, which surveyed 4,591 randomly selected Canadian adults, revealed that women are almost three times more likely than men to quit their job to provide care to others.
In fact, 30% of women have decreased or outright halted savings contributions as a direct result of having to care for children or elders. And 16% have reduced their work hours in order to have more time with loved ones.
The effects of these decisions can actually affect women twice — once as young mothers caring for children, and again when they’re more established but need to care for aging parents. “Caring for sick or aging loved ones can often boomerang later in life just as women's careers are taking off and their income and ability to save more money increases,” the release states.
Some 42% of Canadian women aged 55 to 64 are already taking care of aging parents. And it’s costing the country $33 billion a year, “with the largest impact falling to women.”
“You may make a deliberate choice to take time off to care for kids and plan for it accordingly, but more often than not, we don't plan for unexpected curveballs that can affect our loved ones' physical or mental health and can impact any plans to catch up on savings,” says Kathleen Woodard, senior vice president at CIBC Imperial Service. “Your best bet is to plan ahead and take steps now to help you weather uncertainty later on.”
Much of that uncertainty has to do with wanting a comfortable retirement. These financial sacrifices can leave women, who tend to live longer than men, without adequate retirement savings, since they need to be able to support themselves for a longer period of time than men. In fact, 65% of women said they are concerned they will run out of money in retirement.
On average, men aged 55 and up have $250,000 saved. Women in the same cohort, however, have only $125,000 saved, on average.
There is a small silver lining. The study revealed that women tend to gain financial confidence as they age. For example, only 44% of women between the ages of 18 and 34 feel confident about investing, but that number rises to 68% in women aged 55 and over.
Plus, 90% of women are the primary or co-decision maker when it comes to investing and they’re still active participants in their own financial planning.
“Women take on the bulk of care responsibilities for children and aging loved ones. However, it's encouraging to see that despite the pull of family duties, women are jumping into the driver's seat when it comes to their own financial well-being,” says Woodard.
“Making the decision to quit working, reduce hours or forgo career advancement can have a direct impact on savings, so it's critical to put a plan in place and take steps to address any savings shortfall to ensure their own financial security down the road.”