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Retirement Advice for Women


aonTeboho Makoetlane

It appears that the history of unequal opportunities to life financial freedom has made its way into women’s chances to a comfortable retirement as well. A recent research has shown that 83% of women are not saving enough to meet their needs in retirement, compared with 74% of men. Recent industry research forecasts that women will need 16.2 times their final annual salary to meet their needs in retirement, compared with just 15 times annual salary for men. In general there is a huge gap between what women need and what they are actually on track to have saved to retire at the age 65 years. For women this gap is on average about 4 times salary, while it is about 3.7 times for men. For women, this shortfall might mean that they should work until 69 years – a year longer than men – to meet 100% of their needs in retirement.

There are various stumbling blocks for women when it comes to saving enough for retirement, including longer lifespans, lower salaries (on average), and a greater likelihood  of cashing in from their retirement investments or employer sponsored pension funds. Employers therefore need to play a role in reducing this inequality by providing overall financial well-being and personal finance advice to women. The HR office should dedicate resources towards encouraging financial literacy for women, for example creating an email distribution list of financial “devotions” every week to proliferate messages such as: “Your annual salary increase is coming in two months, use part of it to change your retirement outcomes. Exercise your right to increase your retirement contributions”.

Clearly, waiting for government or employers to respond to these gaps will not only damage women chances to a good retirement but also compound the responsibility that each woman needs to take towards their own retirement. Therefore women ought to take matters into their own hands. The following are a few things that you need to do as a woman:

  1. Make savings a standing budget item

No company, no household and no individual can run healthy financial resource allocation without a clear documentation (in black and white) of expenditure versus sources of income generated at a point in time. In general people don’t budget and eventually find it difficult to save money for retirement. Women should learn to interact with their shopping lists and do frequent inventories of household items that are necessary or unnecessary as a way of using saved money on daily expenses as extra capital to invest towards retirement. Make saving for retirement your first budget item! Do not make excuse that you did save for retirement this month because there was a 50% off sale this month, you do it religiously, with or without comfortable conditions.

  1. Don’t be intimidated by the jargon

The thipa ka bohaleng saying must be applied everywhere. The world of money is all about jargon to the point where it causes fear, inertia and inaction. But do not let jargon get in the way of you learning what you need to learn. Do not get lost in a lot complicated research and theory of money, just obtain the basic principles and apply them. For instance, you need to make a minimum contribution of 15% of your monthly salary and avoid debt.

  1. Increase your savings rate

It’s funny that we observe all these gaps and yet in Lesotho women go into mechaellano or mekholisano more than men. In a similar vein, most mechaellano focus on survival issues, which are short term in nature. Towards retirement, women generally save less than men by about 1.5% of salary. The rule of thumb is that your total savings rate towards retirement must be at least 15%. Women should actually consider 18% because of the above gaps. Our Income Tax Act (1993) allows retirement contributions up 20% (beyond which PAYE will apply) and women must take advantage of this.

  1. Take advantage of workplace benefit

Not many employers in Lesotho are aware of the value of workplace financial wellness programs in boosting productivity and the general welfare or its people. Most employers easily spent money towards subsidising a pension and then ignoring the soft financial education during the employee’s career. Financial wellness programs have become a very important employee benefit over and above the traditional retirement products. A few employers have started engaging expert help to deliver financial wellness workshops and you therefore must ensure that you participate fully as a woman. These programs will help you learn and assess your retirement readiness.

  1. Seek professional help

You have an advantage on this one. Men mostly break a new DIY coffee table before they read the manual. But you are more likely to ask for the manual even before you open up the box, and therefore obtaining professional advice on your investments should be easy. Ask for assistance with a purpose to become knowledgeable to a point where you can pass that wisdom to your peers or next generation.


  1. Don’t cash out

The breed that used to stay with one employer for over 35 years have all but retired or we should be seeing off a few that remain in the next few years. Likely, there will come a time when you leave your employer. But that’s not the time to cash out your pension or provident fund savings. Instead, keep saving! There are different products available in the market that were designed to preserve your retirement capital, depending on whether you are moving to another employer or you are going to start your own business. Most NGOs in Lesotho hire women than men, and it is very tempting to cash out your pension or provident when the project phases out or upon contract renewal. Repeating the pattern of cashing out from employer to employer over the course of your career deprives you of the benefits of compounding.

This advice is for both women entrepreneurs as well as career women. The discussion gets a bit tougher on women entrepreneurs because they must figure out everything for themselves and there are no subsidies from the employer. Happy women’s month!

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