How can couples save if only one of them works?
David Curmi, this time in his personal business capacity and not as president of the Malta Chamber of Commerce, has given an interview to Times of Malta in which he (rightly) lays emphasis on the importance of saving for retirement.
This is not a new argument, nor a fresh issue. And like almost everyone else who has tackled it, Curmi speaks about this important matter while skirting around the elephant in the room: that the main reason people are not saving is not that they are spending too much (Maltese people on average hardly lead spendthrift lifestyles) but because with most couples, only one of them is earning.
This means that one income and the contributions of one pension have to support two people. That one income might be enough for two people to live off but in most cases it is certainly not enough for two people to live off and also to save from.
David Curmi mentions – again, correctly – the need to raise the retirement age in line with life expectancy and remarks that Malta is out of step with other EU member states in this regard. But he should also have mentioned the far greater contributory factor that the majority of women of working age are, in Malta, not contributing to the economy but still taking from it, at least after pensionable age and before that in terms of health care and education for their children, besides other benefits.
Curmi speaks of the need of an education campaign – however, it is pointless having an education campaign about the need to save when households are not bringing in enough money to make that possible. The real education campaign required in Malta is one to emphasis the importance of women playing their part, especially when children are grown and there is no excuse, because the world has changed and you can’t live and save off a single income unless that income is relatively large.
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http://www.timesofmalta.com/articles/view/20140901/local/no-savings-puts-retired-life-at-risk-of-indignity.533932
There should be an ‘opt-out’ clause for social security contributions.
For some earners, there is a huge disparity between what they contribute in their social security contributions, and what they would eventually be paid by way of pension. Mathematically, that equates to less than 1% yield on their contributions (inflation excluded) – so effectively at a loss.
I would gladly accept the risk and make my own pension plans, without the need to do two (a second running in parallel to the state pension). The latter is grossly unsustainable, anyway, and no amount of sugar coating can disguise this fact.
Lastly, if this heidous socialist remnant – aka state pension is retained, and indeed tied to life expectancy, then I would expect women to work 2-3 years more than their male counterparts, since they 1) live longer; and 2) typically earn less during the course of their working life.
Hear, hear, with a huzzah thrown in.
Lovely reasoning, jack. So because employers typically pay woman less because they are, well, women, force women to work longer.
I’ve worked all my life so have no issue with women at work. However, the truth is when I worked in the corporate world I always had to work twice as hard as my male counterparts to be considered as worthy.
I have heard people (and not just men) say they wouldn’t pay a woman as much as a man because one day, maybe, she might have children. So just in case pay her less.
Our society hasn’t changed much for all the talk of equality.
I never said I condoned the wage inequality, but denying it would be foolish.
Not only do women earn less on average (and this is an undeniable truth – for a plethora of reasons – social / biologivcal etc;) but they live longer on average too – therefore, it would be logical that they should be made to contribute more. Call it self-interest if you wish.
Erm.. I was under the impression that the social security contribution also covered your medical expenses, and those of others who may not be able to afford medical treatment.
Or are you suggesting we go down the American path of ‘I’m alright jack’, with the consequence that there is excellent treatment for the few but not for the many?
What a joke. I had and still have life policies but the funny thing is that the local ones except for one are always going down. An MSV life policy on the first year it made a huge profit, in the second year wonder of wonders it loses all the profits plus reducing in value and this is happening every year. One is promised that one gets the whole amount invested, but what about inflation?
A foreign life policy but managed locally profits are nil but if this is payed using you capital you will be charged 9%.
A capital investment in aqua solar whatever, so many persons, allover the world buying panels and after five years the investment makes a profit of 0.01%.
The authorities are thinking of third (or turd) pilar investment.
Malta is more Arab than most Arab States in matters relating to the place of women in society.
The cherished ghonnella (sbejha patria…) is nothing more than a hijab (barra minn fuqna! Ahna Nsara sa mill-eqdem zminijiet bla bla bla…)
I dont agree with him. Almost all women under 45/50 year of age work, with a considerable number of them with undeclared income. And yes, Maltese people do spend money (not the Gozitans). For instance, Sicilian businesses are so happy with Maltese people.
I thought my retirement age is already set at 65 years
I went back to work after seventeen years when my family was complete and my youngest was nine years old.
Now I am a pensioner and enjoying my pension.
I have my own pension and that gives me some power and independence.
If women know how important it is that they work and pay national insurance, I am sure they will go out to work when family conditions allow it.
You said it very well and it never struck me that those women who do not work are benefitting from health and education services for themselves and their family. So it is important for all that women contribute towards the economy.
I did make some kind of pension plan by investing io the Malta stock exchange.
When dividends were paid I used to receive a reimbursement from the 35% withholding tax and re-invest the dividends in some more shares.
That was in the bad old days when GonziPN ruled the roost. Now that there is Professor Edward Scicluna and Dr Joseph Muscat who want to create a new middle class I won’t be receiving any of the withholding tax which is even at a rate higher than the highest income tax rate which I believe is 32%.
This will hit the middle class next December when they won’t find any reimbursement cheques from the Inland Revenue Department.
Thanks to Joseph .
I know maybe a handful of women who don’t work. The other 99% all work.
[Daphne – Well, with me and my age cohort, it’s the other way round: 1% work and 99% don’t. And the ones who work tend to have never had children.]
Maybe he should be talking about the slave labour wages that are paid out in this country, which make it near enough impossible to save anything but a few euros a month.
Must be the age gap then. I’m in my 30s and as I said, they all work at this age. My mum doesn’t but she’s 60 and enjoying it.
Renzi like Garibaldi is fiddling with the “mille”. For Garibaldi it was the thousand men, for Renzi it is the thousand days. What has this to do with Malta taghhom ilkoll ? In his target Renzi wants Italian workers to work and earn as much as the German workers are doing. This is what our Government With Union should be advocating. Higher remunerations, higher pensions that will enable pensioners to live comfortably in retirement and be able to afford that at least their pension runs into the fourth and fifth week. This is what our young boy should be jealous of the younger Italian boy. These are the lofty ideal our Joe should be jumping and leaping in joy to achieve. Only then will all the Maltese be living happily ever after.
I usually agree with a lot of what you say Daphne, but on this issue I don’t agree with you at all.
I have decided to be a full time mum and enjoy my son to the full. I want to be the person who educates him and leads him through his development, and not other members of my family, or complete strangers.
At 39 my husband and I decided to have kids because WE wanted them, it is a choice everyone is free to make. I don’t believe in shoving the responsibility onto family or dumping my kid in daycare, just in order for me to be able to work, and show to the world that I am no old fashioned woman!
I don’t care what people think, and I am sick of people being critical of stay at home mums as though they are some inferior stupid breed. I have a degree, and have worked in good positions before now, so I am not staying at home because I am some brainless moron! I would rather make financial sacrifices in order to stay at home with my child.
[Daphne – No need to get upset, Christina. If you had your first child at 39 then presumably you worked for around 20 years before that, so you did your bit. It’s much the same as doing it the other way round: having your children in your 20s, raising them, then going to work at 40 for the next 20 years. The women I’m talking about are those who have children young or fairly young, raise them, and then when their children are in their late teens or 20s and they’re in their 40s and still able to contribute even if only for their own sake, they do nothing instead.]
Maybe that’s why Malta’s unemployment figures are so absurdly low.
Let the flaming begin.
We need to address the negative way we are raising our children. It is almost taboo to make your children grown up and become independent . Seems like keeping them home until they get married is still the order of the day.
We spoil our children into adulthood making it hard for mothers to work . The reality is mothers do it all…come home and prepare full on meals , clean house, clean clothes etc…. When most children don’t lift a finger. When will it be ok for mothers to make their children contribute without feeling like a wicked witch ? We are still too back wards socially .