Why Women Should Approach Saving for Retirement Differently Than Men during COVID

By Britt Erica Tunick

The inauguration of Vice President Harris may have put a major crack in the glass ceiling, but men and women are still far from equal in the work world, and the COVID-19 pandemic is only exacerbating that gap. Despite all the changes that have taken place over the years, women remain society’s primary caregivers –a fact that has forced a significant number of women to leave the workforce since the beginning of the pandemic. Given this reality, there are several things that women should think about differently than men when it comes to saving for retirement.

Between children attending school remotely, sick, or elderly family members, and multiple other factors, many women have found it impossible to manage caregiving responsibilities and continue to work. In fact, in September 2020 alone, 865,000 women left the workforce, close to four times the amount of men who left during the same period, according to the U.S. Department of Labor. Added to that is that fact that women are typically paid less than their male counterparts and they hold a disproportionate number of the jobs that have been hit hardest by the pandemic –such as positions in hospitality, education, and daycare services. Because of all of this, women need to be proactively planning for their futures. Following are a few of the things women should think about when saving for retirement:

• On average, men die seven years earlier than women. That means that if a woman is married and is the same age as her spouse, she is likely to find herself on her own some day and needs to plan in advance for this reality.
• If juggling caregiving and work is proving too difficult, check with your employer about temporarily switching to a part-time arrangement before just leaving the workforce altogether. Anything that allows you to continue saving for retirement, particularly with a company-sponsored 401(k) plan, will make a significant difference in your overall savings in the long-term.
• If leaving the workforce is unavoidable and you no longer have access to a 401(k), make sure to continue contributing to an Individual Retirement Account (IRA) if you can swing it. Due to the power of compounded growth, even minimal contributions will have a big impact if retirement is still way off.
• If you have left the workforce, make sure to revisit your day-to-day spending. Look at any areas within your budget where you can scale back or eliminate expenses.
• If you have existing retirement savings, make sure to review the allocations within them to make sure they are still the best for your individual circumstances.
• If you receive a check from the government as part of The Coronavirus Aid, Relief, and Economic Security (CARES) Act,  try and invest a portion for retirement if at all possible, particularly given the recent growth that the stock market has been experiencing.
• Check with any women’s groups or professional organizations that support women in your area for educational offerings focused on investing for women.
• While the cost of a financial advisor may be a deterrent, the benefits of having someone knowledgeable who can help tailor a retirement plan to your individual life and circumstances is usually well worth the expense.