One in four women workers who are employed or recently unemployed say their confidence in their ability to retire comfortably has declined amid the coronavirus pandemic.
However, only 17% of women say they are “very” confident they will be able to fully retire with a comfortable lifestyle,” according to a recent report released by the Transamerica Center for Retirement Studies (TCRS).
“2020 marks the one-hundredth anniversary of women’s right to vote in the U.S,’” Catherine Collinson, CEO and president of Transamerica Institute and TCRS, said in a statement. “Since then, women have made great strides in educational achievement and career opportunities. Despite this progress, they continue to be at greater risk than men of not achieving a financially secure retirement.”
Women and Retirement: Risks and Realities Amid COVID-19 examines women’s finances before and during the pandemic, and their expectations about retirement.
Work, finances, and retirement
As of June 2020, the survey finds:
- Fifty-two percent of women workers have experienced one or more impacts to their employment situation as a result of the pandemic, including reduced work hours (24%), layoffs (16%), reduced salaries (13%), furloughs (13%), and/or early retirement (four%).
- Women face competing financial priorities. Almost six in 10 women cite paying off some form of debt as a financial priority (59%). Other financial priorities include saving for retirement (50%), building emergency savings (44%), and just getting by to cover basic living expenses (33%).
Seven in 10 women are saving for retirement (70%), including those saving in a current employer’s 401(k) or similar plan (49%), outside of work (31%), and/or a former employer’s plan (9%).
Despite the challenges amid COVID-19, women, for the most part, are staying positive. More than four in five women have close relationships with family and/or friends (86%), consider themselves to be a generally happy person (85%), and are enjoying life (84%). However, 44% often feel anxious and depressed, while 35% are having trouble making ends meet.
Amid the pandemic: How women can improve their retirement outlook
“Many women are confronting pressing short-term priorities that may take precedence over saving for retirement,” Collinson said. “However, it is imperative that women safeguard their financial futures.”
Specific, actionable steps, illuminated by the June 2020 survey, include:
- Engage in financial planning. Creating a budget, prioritizing expenses, setting short- and long-term goals, and developing a retirement strategy are important steps in improving fiscal health. According to the June 2020 survey, fewer than one in five women (19%) have a written financial strategy for retirement.
- Be proactive about remaining employable. When asked if they have taken any steps to ensure they will be able to continue working past 65 or in retirement, only 46% of women say they are focused on performing well at their current job. Even fewer indicate they are keeping their job skills up to date (41%), networking and meeting new people (20%), and scoping out the employment market and opportunities available (18%).
- Safeguard health. Now more than ever, it is important to safeguard one’s health to be able to continue working and to enjoy retirement. When asked about which health-related activities they do on a consistent basis, a small majority of women say they are eating healthfully (58%), seeking medical attention when needed (55%), exercising regularly (54%), and getting plenty of rest (53%).
- Start the conversation. Only 22% of women frequently discuss saving, investing, and planning for retirement with family and close friends.
“Preparing for retirement involves careful budgeting, saving, planning, and goal-setting,” Collinson added. “However, success also depends on protecting one’s health and employability, which women should embrace in both prosperous and challenging times.”
Before the pandemic: Women’s retirement expectations and financial realities
As of late 2019, the survey outlined these financial risks and realities:
- Fifty-four percent of women expect to work past age 65 or do not plan to retire – and 56% plan to continue working at least part-time in retirement. Eighty-one% of these women cite financial reasons, while almost as many (76%) cite healthy aging-related reasons. Amid widespread unemployment, the question looms whether there will be opportunities available to do so.
- Household retirement savings are low. Women have saved only $28,000 (estimated median) in all household retirement accounts. Retirement savings increase with age: Millennial women have saved $11,000, Generation X has saved $46,000, and Baby Boomers have saved $84,000 (estimated medians).
- Emergency savings are low. Women have only $5,000 (median) in emergency savings. Emergency savings increase with age: Millennial women have saved $2,000, Generation X has saved $5,000, and Baby Boomers have saved $10,000 (medians).
- Almost four in 10 have served as a caregiver during the course of their working career (38%). Among them, nine in 10 made some sort of adjustment to their work situation (91%), such as using vacation days, missing days of work, reducing hours, reducing job responsibilities, and/or taking a leave of absence, among other work-related adjustments.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
