Women and the financial frontier – Addressing the financial challenges facing women, with tips men can use too.

Women are centre stage in 2018. They’re speaking out across social media and demanding change – and there are signs they’re well positioned to get it.

The federal government has a gender‑balanced cabinet for the first time in history. Globally, female empowerment, workplace equality and the issues women face are the subjects of daily headlines. And in February, Maclean’s magazine printed two versions of its cover – offering the issue at $6.99 for women and $8.81 for men to draw attention to pay equity and how far we still have to go to achieve it.1

Financial empowerment is an important frontier for women. They have a lot going for them already. More and more Canadian women are taking their places in university classrooms and corporate boardrooms,2 suggesting strong earning potential. The wage gap in this country has narrowed3 as women’s median annual earnings have more than doubled over the past half century.4 Furthermore, women have a track record of outperformance in investing. One U.S. study found that women achieve a 0.93 per cent return advantage because they don’t trade in and out of investments as frequently as men do (and therefore don’t lose as much to commissions and fees).5 Another found that women have a 0.4 per cent performance edge annually, and boost their balances further by setting aside an average of 9.0 per cent (compared to men’s 8.6 per cent) of their paycheques in workplace retirement accounts.6 However, as the Maclean’s covers pointed out, a significant wage gap persists.

Recent data from Statistics Canada shows that women working full‑time in Canada earn, on average, $0.74 for every $1.00 their male counterparts make. The hourly wage rate, which takes into account that men often work longer hours than women, shows women earn $0.88 for every $1.00 men earn.7 So, women may set aside more of their paycheques, but if those paycheques are smaller the dollar amount they save won’t be as high. And while women may get slightly higher investment returns, if those higher returns apply to a smaller asset balance they’ll likely still end up with less. That’s a problem because women often need more savings than men.

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