Pandemic financial challenges are placing many women’s retirement in jeopardy.
Women already face obstacles to retiring securely, such as lower pay and possible time away from work for parenting or caregiving duties. Now the COVID-19 pandemic brings even more challenges to women trying to save for retirement, according to “Women and Retirement: Risks and Realities Amid COVID-19,” a report from the Transamerica Center for Retirement Studies (TCRS).
“Amid the pandemic, these challenges have intensified with layoffs, furloughs, and extended periods of time working from home,” said Catherine Collinson, president of Transamerica Center for Retirement Studies and one of the authors of the report. As a result, many women face pressing short-term priorities they feel they must place ahead of saving for retirement.
“Before the pandemic, women were already financially vulnerable, and their ability to achieve a secure retirement was uncertain. The pandemic has exacerbated their risks,” said Collinson.
Even during the pandemic, however, women can still take steps to improve their retirement outlook.
Here are 6 ways COVID-19 puts women’s retirement at risk and measures they can take to save more for…
1.Reduced income due to the pandemic
More than half of women workers reported their employment situation has been impacted as a result of the COVID-19 pandemic, according to the report. Many experienced reduced work hours (24%), layoffs (16%), reduced salaries (13%), furloughs (13%) and/or early retirement (4%).
Taking steps to remain as employable as possible is key to continuing to save for retirement, according to the report. TCRS recommends keeping job skills up-to-date, networking and meeting new people, along with staying on top of the employment market and job opportunities.
2. Competing financial priorities
Nearly 6 in 10 women (59%) surveyed told TCRS that paying off debt is a financial priority. Meanwhile, they must juggle other financial priorities as well, including saving for retirement (50%), building emergency savings (44%) and “just getting by” to cover basic expenses, according to the report.
To better manage financial priorities, TCRS recommends focused financial planning, including creating a budget, setting short-term and long-term goals and developing a retirement strategy.
Many consumers’ financial plans will include paying off debt. If you need help paying off your credit card debt, you can get guidance from Debt.com.
3. Most women still saving for retirement
Despite pandemic challenges, 7 in 10 women said they are currently saving for retirement, including through an employer-sponsored 401(k) or similar retirement plan (49%), a method outside of work (31%) and/or a former employer’s plan (9%).
4. Retirement confidence impacted by COVID-19
Around 24% of women surveyed said their confidence in their ability to retire has declined due to the pandemic, compared with only 20% of men, according to the TCRS report. Only 17% of women are “very confident” that they think they can fully retire comfortably, and 12% of women are “not at all confident” in a full and comfortable retirement.
5. Most women don’t have a written retirement strategy
Only 19% of women surveyed in the TCRS report said they have a written retirement strategy amid the pandemic. “Of concern, 39 percent of women do not have any strategy at all, which is significantly more than the 25 percent of men,” according to the report. “Every woman needs her own retirement strategy about retirement income needs, costs and expenses, and risk factors.”
6. Fewer women than men dipping into retirement savings
Even with heightened job insecurity and reduced income challenges, fewer women than men are tapping retirement savings because money is tight due to the pandemic. About 18% of women surveyed said they have taken – or plan to take – a loan and/or withdrawal from their 401(k) or another retirement plan, compared with 37% of men dipping into retirement savings. This article originally appeared on Debt.com
