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Joan Rivers encouraged women to become independent.

Women’s Poverty: a State of Mind?

“Please!” the late Joan Rivers would have replied.

Most reasonable people would agree that women are poor because they make less money than their male counterpoints. It’s hard to imagine anyone believing that poverty is a psychological condition, but then, I know too many women who leave the finances to their spouses and end up during the senior years facing severe cutbacks in their standard of living.

Women know how to pay the hydro and the gas bills, but today we must woman up to understand the difference between a mutual fund and an ETF, a RRSP or a TFSA, and the percentage points between an open and closed mortgage.

It’s not about doing the math or the availability of quality information on the Internet. We all have calculators for adding and subtracting. It’s about becoming financially literate and confident about making important financial decisions that will protect your interests now and in the future.

In order to plan for a good retirement, women, married or divorced as well as single, need to know about more than the shifting balance in their chequing accounts. Today it’s all about the stock market (where you can make more than one percent on your savings), government programs such as CPP and OAS and corresponding tax regulations.

For women on the verge of retirement or living in retirement, it’s about understanding the government-mandated terms of withdrawals from your RRSP or RIF. If your husband is investing in a spousal RSP, the wife should know what’s in the account and if it’s being wisely invested. In each case, every married woman should understand the financial implications if she were to divorce or separate from her partner.

For common-law couples, and there are more and more of us in this category, a spousal agreement designed by a lawyer and signed by both parties is de rigueur. Don’t end up like the woman who recently went public saying she must sell her home because she forgot to have her common-law spouse name her as the beneficiary of his pension before he passed away.

Women need to know how to negotiate a mortgage, healthcare costs, auto and property insurance, workplace and private pensions, as well as developing a robust acquaintance with real estate and rental prices. For most, the home is the biggest asset and after retirement how a women finesses that asset is increasingly important to how well she lives in retirement.

For all the noise about how trendy it is to rent in downtown Toronto, Boston, Manhattan or San Francisco (see Richard Florida’s glib article in the Atlantic about how home ownership is a thing of the past) most women, Millenials and Boomers alike, wish to own their own home. Women of all ages and incomes understand that home ownership is the rock upon which a sturdy financial pyramid is built. Without it, seniors, particularly those living on a fixed income, are prey to the vagaries of a constantly changing market.

For instance, Canadians recently learned that Calgary home sales fell seven percent in February while in Vancouver prices jumped nearly 14 per cent. Likewise, Toronto home prices posted double-digit gains, surging 15 per cent in the same month. The average price of a detached home in the Toronto 416 area is now above $1.2-million and in the GTA suburbs it’s soared to $816,705.

A working knowledge of prices in the neighbourhood is doubly important if considering taking out a line of a credit or a reverse mortgage –or selling property to relocate to a rental. Viewing the list price of the home in the context of national trends helps to make sound, evidence-based choices rather than last-minute snap decisions in a crisis situation.

According to the Globe and Mail’s real estate expert Tamsin McMahon, “In cities such as Edmonton, Winnipeg and Ottawa it is now cheaper to make a mortgage payment on a condo than to pay rent. Surprisingly, even buyers in Vancouver are spending slightly less of their income on mortgage payments for condos than they did in the past.”

A good example is Ottawa, where the National Bank reports that it costs nearly $200 more a month to rent than to pay down the mortgage on a condo.

It sounds like a lot of work, this auto-didacticism, but most women can get up to speed in no time if they invest the time. Self-imposed ignorance about finances is not the way to plan for retirement.

There’s no question: Women are poorer than men because they are paid less for equal work and because they take time from careers to raise children. Women still do the bulk of the family chores, for which they are not compensated, but which eat up considerable time, effort and ingenuity.

Scary as the findings in a recent New York Times article are, “Marriage significantly depresses women’s earnings, and the arrival of children has an even stronger effect,” most women know these assertions to be true. “Men, meanwhile, tend to earn more after having children, and studies show that’s because employers see others as less committed to work and fathers as doubly committed to breadwinning.”

Given all this, it’s up to women to help level the playing field. Today, when 30 per cent of single women over 65 are living in poverty, women must ensure that they won’t be working the night shift at Tim Horton’s when they’re seniors.

Joyce Wayne

Joyce Wayne has been writing about social issues, business and culture for forty years.

This year she is publishing her second novel, Last Night of the World, a spy thriller about Soviet spies operating in Canada during World War II. Joyce is also the author of The Cook’s Temptation. An award-winning journalist, Joyce is most interested in the stories of men and women trying to thrive in challenging circumstances.

Here, she is exploring matters relevant to the lives of retirees and soon-to-be-retirees facing the rapidly changing circumstances of the new retirement.

Joyce Wayne

Joyce Wayne

Author of the recently-released novel 'Last Night of the World',
Joyce has won many awards for her writing.

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