Best Mother’s Day Gift a Job?

Are women too likely to give up their own financial and personal goals in order to support their families? American journalist Leslie Bennetts provided her answer in The Feminine Mistake: Are We Giving Up Too Much? The book is meant as a response to what’s perceived as a rising trend – educated and successful women dropping out of their careers in order to stay home to raise children. And it draws heavily on the experiences of the Baby Boomer generation to make its points.

Bennetts’ argument against women dropping out of the workforce, even for a few years, is primarily an economic one. In the first chapter she quotes Barbara Risman, the head of the sociology department at the University of Illinois at Chicago: “Some of these women are ideologically committed [to staying home], but most see it as a temporary break in their labor-force participation that might last five or six years… They expect this to be a break until their children are older, but I think they underestimate the toll this will take on their lifetime earnings and their ability to keep up in a field.”

The costs of staying home certainly can be far-ranging. With less room for RRSP contributions, a stay-at-home spouse does not receive the same tax breaks on savings geared towards retirement as a working individual and may not save as much, even if household income allows. And although the Canadian Pension Plan allows CPP credits to be split between spouse in the case of divorce or separation, there may not be as many credits to go around.

Bennetts cites interviews with many women who stayed home, perceiving it to be for the good of their family, only to find that divorce, illness, or death seriously impacted on their standard of living. She also quotes several women who encountered the “grey ceiling” when they tried to return to their former professions, even after a gap of 5 or 6 years, never mind 15.

These interviews are compelling, and as examples for her primary message to women — stay in the game — they carry emotional weight. Many, if not most, of us know women who have suffered economically after a divorce, sometimes for the rest of their lives. But without any stay-at-home success stories or a closer examination of how a spouse at home can positively impact on family economics, there is a sense that the whole story isn’t being told.

When Bennetts steps back to look at statistics, however, it’s clear that she’s identified some important issues. It is clear that women need to plan for their retirement without assuming that they will always have a spouse to support them. According to statistics cited at a White House Conference on Aging in 2005, more than 30 million of America’s 40-million-plus Boomer women will not be able to afford to retire and will fall below the poverty line. She also states that the average age of widowhood in America is only 55.

In Canada the figures are similar, at least when it comes to demographics. A Statistics Canada web page on widowhood states:

In 2003, 82% of Canadians aged 65 and older who were widowed were women, and senior widows outnumbered senior widowers by about five to one. In 1921, that ratio was two to one. This increase can be attributed to longer life expectancies for women, as well as the fact that brides were often younger than their grooms.

So how can women protect themselves? Bennetts’s solution is for women to stay employed – or get back to work as soon as possible. But there are other ways, both for younger women and those approaching retirement age: life and disability insurance, long-term care insurance, pre-and post-nuptial agreements, and of course a good divorce lawyer, if it becomes necessary. Another way is to continuously upgrade skills so as to stay attractive to employers, or to develop one’s own business. Women are also working past the traditional retirement age, which extends their professional lifetime and may lessen the economic impact of a gap in earnings.

The lesson perhaps best taken from the book is not to make assumptions that a healthy family financial pictures always translates to a secure financial future for both partners. So as a Mother’s Day gift, consider sitting down and really examining your own financial health — and encouraging your daughters to do the same.

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Women and finances
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