I was thinking earlier today about three women friends who are all in the same boat: over sixty, single/divorced, childless, and with not much money or income to their name despite running their own businesses. One in particular, who doesn't own her own place, is looking down the barrel of a pretty dismal retirement, assuming she can ever afford to.
There's a theory by The Barefoot Investor that one can retire quite happily with $250K in superannuation, get the aged pension (part or full depending on your savings) and work maybe one or two days a week (both for a bit of extra cash and to keep your mind active).
That's fine but my three friends don't have $250K in super. Luckily one owns her own apartment. She also has more in super than the others, so I think she'll be better off. Let's call her Sherry. Sherry started her biz eight years ago after taking redundancy from her employer. Sherry now has a disability so will be getting financial assistance from the National Disability Insurance Scheme. Her quality of life is going to get worse as time goes on, however, so Sherry needs to assess where she is going to live as she is likely to be in a wheelchair sometime in the next couple of years.
Friend number two, who we'll call Shona, hasn't paid off her house. Her partner left her two years ago after 20 years and Shona apparently doesn't have access to her partner's super. She doesn't have enough super of her own to survive on, so she's keeping on with her struggling biz and hoping that when she reaches pension age in about two years' time she'll own her house. She's renting the house out at the moment to pay it off, and living in the granny flat.
Friend number three, we'll call her Sue, is the worst off of the lot. She had to dig into her super early to pay for major surgery. Divorced many years ago, she got a rough deal out of the marriage and has never owned her own house. Her beautician business is struggling but at 65 she's applied for the pension to make ends meet. I worry how she's going to survive in Sydney with rental prices skyrocketing. At the moment Sue is doing a long term house sit and not paying any rent. She is considering house sitting as a way of life or becoming a companion to an elderly woman. She doesn't want to move from Sydney.
If I have three friends in my relatively small group of friends who are in this position, I wonder and worry how many more women are in the same boat? How many have been ditched by their partners for someone younger (poor Shona!)? How many are worrying that when they retire they won't be able to pay the rent? How many will have to consider moving out of a major city such as Sydney and Melbourne, leaving their friends and maybe family, and moving to a country town where rents are cheaper but where they may miss the city life and culture?
Women's wages have always been less than that of males so women have a rough deal to begin with when it comes to saving for their retirement, on the whole.
Well, you may say, why do these women continue persisting with struggling businesses? Can't they get a job? Huh!!! Despite the government urging employers to take on the over-50s, it's VERY hard for women over sixty to get a job unless they are highly qualified. These days qualifications are everything; a single degree hardly counts any more. To be in the running for a white collar management job you need a double degree at least. Shona has part time work in addition to running her business but can't find a full-time job in the region where she lives.
This is a generation of single women who are going to find their retirement years extremely tough - particularly if they haven't paid their home off. When these women started in the workforce, superannuation contributions from employers weren't compulsory. It's likely many women will have started a super contribution late in their working life. For those entrepreneurs who have their own small and struggling business, you can bet the contributions will be lower than that paid by an employer.
I think we are going to hear a lot more about the plight of 'forgotten women' in the next ten years as they hit pension age and rents continue to rise. It breaks my heart.