I'm studying for a final exam in a class called Sociology of Aging. It's offered through the Sociology department and the Gerontology department at my university. I just read this passage in the online course materials for the unit on Work, Retirement, and Income Security:
Women usually reach retirement with fewer financial resources than men, since they tend to be paid less than men and are less likely to have a pension. This means that retirement can be a stressful prospect for women. Women are less likely to plan for retirement and pick a specific time in advance, and often have less choice in the matter. Various factors influence a women's decision to retire, such as marital status, family responsibilities (i.e., caring for a parent) or restructuring at the place of employment (i.e., layoffs). There are different views about whether women have an easier or harder time adjusting to retirement than men. In short, it depends on the work history and how attached they are to their career or how central a role it played in their life.
Forgive me if I get ranty, but that's it. That's the whole discussion on the different challenges that women face during retirement. Is it wrong for me to expect more from a 400-level Sociology class? I understand that it's a course that's focused on the aging process, but the fact that women retire with fewer financial resources than men is really important to any discussion related to aging. We know that the social determinants of health include financial stability, so why does this issue only get one short paragraph at the end of one unit? Maybe it's not useful to the material to get into a whole discussion about why women are paid less etc., but the fact that maternity leave is not even mentioned really bothers me.
Canadian maternity leave benefits only pay 55% of a mother's income, up to a maximum of $48600, which works out to $514 a week. The government will only contribute to your public pension fund if you're also contributing. When you factor in those deductions (including health care etc.), women taking maternity leave can only expect to bring home around a maximum of 40% of their usual income. It's the same deal for private pension plans. This tends to result in a lot of women choosing to not make contributions during this time because they can't afford the additional loss of income. Making contributions to RRSP's also falls pretty low on the list when you factor in the cost of taking care of a baby. I've heard so many stories about women having to cash in their RRSP's in order to afford to take time off, especially single mothers and women with higher salaries than their partners. Some people argue that it should be the person making less money who takes leave, but we know that this is not an acceptable solution for every household.
What about women who weren't employed prior to having children? Or women who are self-employed? What happens to their benefits, let alone pension benefits? I'm pretty sure that they just don't get any. I could be wrong, I'm not super knowledgeable on the ins and outs of the system, but from what I've read online and heard from other women it seems like you don't qualify if you don't make contributions. My sister-in-law just had a baby in November and she is self-employed, so she doesn't qualify for EI benefits. She's been working 3-4 days a week (she's a physiotherapist) since my niece was just over a month old in order to alleviate the strain on my brother. I'm fairly certain that she is not making RRSP contributions right now. They are both lucky that her job allows her to work flexible hours and that they have lots of reliable family members who are happy to help take care of their baby. There's a lot of families who don't have these options.
Obviously, there's a discussion to be had about planning ahead so that you are financially secure blah blah blah, and I agree with a lot of those sentiments. But as has been pointed out by so many parents, you can never be 100% secure. You don't know what the health status of your child is going to be, or your partner's, or your own for that matter. And I think that when people are talking about being financially secure, they're not necessarily factoring in making maximum retirement contributions during the first 5-10 years of a child's life.
Bottom line: reducing or stopping contributions to pension plans for 5-10 years is going to leave you with less money than someone who didn't have to do that and most of the time it's women who are making these sacrifices in order to take time off to raise kids. So yeah, Mr. Professor, women are retiring in a less desirable position than men, regardless of "how attached they were to their careers". I don't know if I'm just reading more into his lame ass explanations than I was intended to, but I expect more critical observation than this in an upper level Sociology course.