The Hidden Penalty of Motherhood

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Being a mother can be extremely rewarding in many different ways, but it can also have unintended consequences for mothers who want to pursue a career while raising a family at the same time. The so-called “motherhood penalty” can be detrimental to a woman’s career advancement efforts, especially when she has children. In addition, it may hinder their ability to accumulate wealth and establish a financially stable future for themselves.

Even though the motherhood penalty isn’t exactly fair, it’s still a problem that many women have to deal with. It is essential for women to understand how this penalty is imposed on mothers and how it affects their career prospects in order for them to be able to effectively plan their financial futures.

Efforts Made to Fight the Effects of the “Motherhood Penalty”

It won’t be possible to do away with the motherhood penalty overnight. Despite changes in gender equality at work, many women will continue to face its effects. It is a good idea for women who are thinking about becoming mothers to have a solid plan in place for ensuring their financial health. Your vision for your retirement should serve as the primary focus of that plan.

If you earn less, you will likely have a smaller portion of your income available for savings toward your later years. In such a situation, it is imperative for women to make the most of the opportunities available to them in order to build up their savings. This includes putting away enough money in a tax-advantaged plan like your employer’s 401(k) or another plan of its kind to become eligible for the full matching contribution. You can gradually increase your savings rate so that it rises along with your income by adjusting the amount you contribute each year by one percent. This will allow your savings to keep pace with your growth in income.

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If your employer provides a health plan with a high deductible, a Health Savings Account (HSA) is an additional method for saving money in a tax-advantaged manner that you can utilize. Contributions to these accounts are deductible for tax purposes, growth is allowed to accumulate tax-free, and withdrawals can be made tax-free if they are used to pay for certain qualified medical expenses. The maximum amount that can be contributed annually in 2022 is set at $3,650 for individuals and $7,300 for families.

However, what many people do not realize is that once you reach the age of 65, you are permitted to withdraw funds from your HSA for any reason and at no cost. On the withdrawal, you will only be responsible for paying the standard tax on income. It is beneficial for mothers who haven’t quite achieved their retirement savings goals to open a health savings account (HSA), as these accounts can sometimes be used as a supplement to retirement savings in an emergency.

A spousal individual retirement account (IRA) could be an additional method of savings for married mothers who are taking a leave of absence from their jobs temporarily. Even if you don’t have any income of your own, your spouse may still be able to contribute to your individual retirement account (IRA) if you have what’s called a “spousal IRA.” The contribution limits are the same as those for traditional and Roth IRAs: $6,000 for 2021 and 2022, in addition to a catch-up contribution of an additional $1,000 if you are 50 or older.

The Motherhood Penalty: Stanford Professor Shelley Correll

Make the Most of Your Time Off From Work

When you return to the workforce after an extended absence, competition for jobs is likely to be higher. This is especially true if you took time away from the workforce to focus on raising children. Because of this, it is essential to ensure that you make the most of the time you spend at home.

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Maintain an awareness of the most recent developments occurring in your field, and give some thought to ways in which you could expand your skill set during this time. Maintain a current version of your resume while filling in any knowledge gaps that may exist. Don’t forget to keep in touch with the people who are already part of your network while you work on expanding your professional ties.

First and foremost, you need to have a crystal clear picture of what you want your return to work to look like. You can find a better work-life balance by first determining what you want to accomplish professionally and as a mother, and then setting goals to help you get there. Many women are figuring out ways to achieve their goals in spite of the obstacles that stand in their way.

The Hidden Penalty of Motherhood. Source:

A Visual Representation of the Motherhood Wage Gap

The motherhood penalty is the implicit assumption that working mothers are unable to compete professionally on an equal footing with their male coworkers or with other women who choose not to have children. This can manifest itself in the workplace in a number of different ways, but perhaps the most painful consequence is the way it affects a woman’s potential earnings.

According to a study that was conducted by a national think tank called Third Way, the average mother’s earning potential decreases by 4% for each additional child that she gives birth to. It’s interesting to note that things work out differently for men. Men typically experience a six percent increase in their income after becoming fathers. This inverse relationship suggests that employers may still, to a large extent, view men and women in traditionally assigned roles, with women being viewed as caregivers and men as breadwinners.

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Alternately, the drop in earnings that mothers experience may be the result of them taking time away from work to raise their children, or downshifting into a part-time or lower-paying role, so that they can be more present for their family. Both of these options are intended to allow mothers to spend more time with their families. According to the findings of the Pew Research Center, women spend a combined total of 32 hours on childcare and housework each week, whereas men only spend 18 hours on these responsibilities.

There are a variety of other ways that the motherhood penalty can present itself. According to the findings of the study titled “2021 Women in the Workforce,” one in every three working mothers have contemplated leaving the workforce altogether or downgrading their responsibilities in order to care for their children during the pandemic and the subsequent economic circumstances.

When they become mothers, it can make it even more challenging for women to advance in their careers. Employers may have doubts about a mother’s capacity to fulfill the requirements of her professional role if she is a parent. As a consequence of this, they do not provide opportunities for advancement, which is the primary reason why so many mothers reach a professional plateau.

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