The COVID-19 economic crisis tested the mettle of all Americans, particularly working mothers. Research shows that the pandemic’s impacts on women have been far-reaching and potentially long-lasting. Now that the U.S. economy is picking up steam, it may be more important than ever for women to re-examine their retirement planning strategies.
Effects of the COVID-19 Economy
The COVID-19 recession had a disproportionate impact on working women because sectors that typically employ them — including retail, hospitality, and health care — were hit harder than others. As noted in a paper released by the National Bureau of Economic Research, “Employment fell more for women compared to men at every stage during the pandemic, with the biggest gender differences estimated for married women with children.” Many women were forced to cut work hours or leave jobs entirely to care for family members and supervise remote schooling activities when day cares and schools shut down.1
In a Pew Research study, 64% of women said they or someone in their household lost a job or took a pay cut during the pandemic, and nearly a quarter took unpaid time off for personal, family, or medical reasons. Half of women ranked their personal financial situation as “only fair” or “poor.”2
More Than Their Share of Job Losses
Prior to the pandemic, women made up 52% of the population. Yet they represented a larger proportion of the employment decline during the spring, summer, and fall seasons of 2020.
Source: National Bureau of Economic Research, 2021
Retirement at Risk?
When it comes to retirement savings, unmarried women have the most ground to cover, according to an Employee Benefit Research Institute survey. Nearly six in 10 have less than $50,000 set aside for retirement; 31% have saved less than $1,000.3
Couple these statistics with the retirement planning challenges women faced even prior to the pandemic — longer life spans and lower earnings and Social Security benefits, on average — and it’s apparent that women need a carefully considered retirement strategy that will help them pursue their goals.
Making Up Lost Ground
If you or a loved one need to make up lost ground, consider the following tips.
Sources: 1) National Bureau of Economic Research, 2021; 2) Pew Research Center, 2021; 3) Employee Benefit Research Institute, 2021