Why do we focus on financial planning for women? Isn’t money gender neutral? After all, investing in a unit trust or opening a bank account is the same, whether you’re male or female. So what’s all the fuss about?

Apart from issues like wage gaps and single motherhood, the simple statistical truth is that women on average live longer than men. That fact has significant implications when it comes to financial planning.

Longevity affects financial planning for women

As women outlive men by around seven years on average, they will have more years of retirement, which means they need more money than men to fund that longer retirement.

To make up this longevity gap, women should be investing 20% more than men. Either that, or they have to work for more years and retire later.

This is a very important part of financial planning, especially for a married woman. The financial plan cannot be based on the husband’s retirement needs but must take into account the financial needs of the wife who will outlive him.

Let’s put that additional 20% that women need to save into perspective: if, as a rule of thumb, a man needs to invest 15% of his salary for retirement over 30 years, a woman would need to invest 18% in order to have the same outcome.

This is challenging for women who are already paid less on average than men. And if a woman has children, she will often make career choices based on the kind of flexibility the job will allow her as a mother, rather than based purely on whether she can earn a higher salary.

Women pay less for insurance

The good news is that those same longevity statistics mean that women pay less for insurance. Because women outlive men, their insurance premiums are substantially lower. A woman will pay a third less than a man for the same amount of life cover.

For example, based on figures from Sanlam, at the age of 36 a male non-smoker would pay R227 per month for a R1 million life policy. A non-smoking woman of the same age would pay R150 for the same cover. At the age of 46, the man would be paying R426 for the cover, while a woman would be paying only R281.

We see similar savings when it comes to car insurance, because despite what men think about female drivers, women have fewer car accidents. A woman over the age of 35 pays on average 7.5% less for car insurance than a man with the same car.

This difference is even greater between younger men and women. Young men are the demographic most likely to have a car accident, and this is reflected in premiums for both gender and age.

A 20 year-old man would pay 23% more than a 20-year old woman for car insurance. By the age of 25 that gap has reduced to 15%.

So, statistics can also be to a woman’s advantage, but women need to make the most of this by using the savings on risk premiums to fund their retirement!

This article first appeared in City Press.