Two out of three women in Germany will later face poverty in old age. Money coach Dani Parthum explains how this could happen and what women can do about it so that it changes in the future.
What prejudices and clichés do women fight with?
Dani Parthum: I would say neither one nor the other is true. Women are pretty good at finances. We women only have some catching up to do when it comes to handling money with confidence because we have been incapacitated for centuries. We had no financial maturity because we were not allowed to work for money in the Federal Republic of Germany, because we were not allowed to have our own accounts.
That is why women lack practice and tools. But this has nothing to do with clichés and prejudices, more to do with stereotypes that society still packs on us women. That’s why I do what I do: Money coaching with the “money woman” to encourage the women to tackle this. To tell you: You can do it with finances.
Then it works and you get the maturity that men by and large have. Men don’t necessarily know finances either, but they are much more self-confident than women – still! We’re catching up.
What else is threatening women?
If they are still married it is not such a problem because the pension points, and therefore the assets, are shared. There is no great misery for women. It becomes difficult for all women who are in a divorce or who are divorced, who did not have a really good job of their own, or who have worked part-time for many years, sometimes decades. Then old-age poverty threatens.
At the moment two out of three women are threatened with old-age poverty and that is a pretty blatant number, I must say. Women are not rewarded for what they have done for society. So raise children – taxpayers, raise workers, basically. That is not honored by society and that is quite dramatic for women.
I think that politicians must and probably will take countermeasures here. We shall see what that will look like. But it is likely that very many women will slide into old-age poverty. I find that very dramatic.
What is old-age poverty?
If you look at the statutory pensions of men and women, the men get an average of around 1,000 euros per month, which is not much. Women get around 600 euros a month. We can see for ourselves whether we could get by with it. Well, I wouldn’t be able to get by on 600 euros, I couldn’t even pay my rent with that.
The women will have to apply for help and get a little something on top of that, but they will have to downsize significantly: smaller apartments, very likely out of their familiar surroundings. Maybe they can no longer afford healthy food, clothes are missing. They can’t give gifts to their grandchildren, they have to spend every penny.
It is very undignified to live like that. When the women can no longer go to the café with their friends or can no longer afford any little everyday things that sweeten life a little.
What can you do about it shortly before you retire?
It’s pretty late I have to say. Then basically the only thing left to do is to develop an additional source of income. But for this, a woman must be healthy and have a certain level of fitness. Because when I am a little sick, from my professional or personal, family environment, I can no longer work so well.
But in the end, these women are doomed to keep working – if they even get a job. For 450 euros you might get a job, which can cushion it a little. At some point, that will not do more because we are weaker, this is quite a rnormal situation.
If a woman is in such a situation, I would always talk to the ex-husband or the husband again about how they can divide the wealth. Get information, talk to your partner, and those around you about money, and think about it. Maybe another job.
Of course, also build up reserves and deal with the topic, because you can still do a lot even at 60. We women live longer, we live 80 to 90 years – so we still have 30, 25 years. A lot can be done in terms of finances.