Lack of financial literacy hurting women in retirement, say industry professionals

A group of financial analysts is warning women that a retirement savings crisis is comingif they don't increase their financial literacy before it's too late.

On average, women in Canada live longer than men, earn less money during their careers and take more time off to act as caretakers for family members.

Survey data also suggests they have less basic knowledge of personal finance despite their increased vulnerability to shortfalls later in life.

"We live longer, and we retire with two-thirds less money than men," said Sophie Palmer, president of CFA Montreal a group representing chartered financial analysts.

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"Women take more time off during the course of their business lives to have kids. It gives us less time to make money, and then we have a gender pay gap, and we live longer," shesaid.

CFA Montreal has been working for decades to bolster the presence of women in the local financial community. According to its figures, only 17 per cent ofCFAsin Montreal are women.

Last week, the group held a networking event for women in investment management that drew about 500 attendees. Events like these help correct what Palmer called finance's "brand problem."

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"When you close your eyes and you picture a portfolio manager at an asset-management firm, you rarely picture a woman," she said.

This brand problem, she added, extends all the way into women avoiding learning even basic levels of financial literacy.

How bad is it?

Only about 15 per cent of women could correctly answerthe five key financial literacy questionsasked in a 2014 financial capabilities survey by Statistics Canada.

This blind spot is especially dangerous since Canadian women live an average of 4.5 years longer than men, so they need more savings going into retirement.

But women tend toretire with less due to the gender wage gap, which currently seeswomen making an average of 87 cents for every dollar a man would in the same job.

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Help from the federal budget

The recent federal budget took some steps to remove the financial barriers women face, with earmarks for early learning and child care.

Palmer admits that as a mother and finance professional, sheoften finds herself logging in to work after her kids have gone to bed.

This balancing act is one of the reasons more women work part time than men. Of people working part time, twenty per cent of womenversus about two per cent of men, say they do it because of family or personal responsibilities, according to Statistics Canada.

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But improving financial literacy among women is about more than just narrowing the pay gap, said Palmer.It also means making women comfortable with the money they've earned and giving them the confidence to make investment decisions.

So Palmergoes into universities with CFA Montreal to talk to young women about financial literacy and is thinking of working with even younger women in the future.

"We're seeing the numbers and we're really thinking, we have to do something," she said.