COVID-19 Exposes Cracks in Financial Equality for Women
Women are more vulnerable during this time of financial upheaval. Here’s why and some steps they can take to help improve their outlook long term.


The COVID-19 pandemic is further exposing the financial inequities between men and women and is threatening to undo the few steps forward women have taken over the past several decades in the workforce and in their bank accounts.
As of December 2019, women held more jobs than men, but on average, women still face a pay gap of 82 cents to the dollar and an even more dangerous wealth gap of 32 cents to every dollar owned by a man. Women are already financially behind, and the virus is having a disproportionately more painful impact on women in terms of job loss, reduced savings and mounting debt, creating serious financial headwinds for women.
Job Losses Hit Women Harder
According to the National Women’s Law Center, women and minorities are much more vulnerable during times of job loss. Two-thirds of minimum wage workers in our nation are women, many of whom are moms with a higher risk of layoffs, and few enjoy paid leave or health insurance. These women typically have less tenure due to movement in and out of the workforce to care for young children or aging parents. This lack of tenure, combined with lower-ranking positions, stacks the decks even further against women, who lose their jobs at disproportionately high rates during times of financial downturns.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The majority of those filing for unemployment due to COVID-19 are women. According to Pew Research, women lost 11.5 million jobs compared to 9 million men from February to May. Since the outbreak hit, nearly one in five women report that they have lost their job, and of the 700,000 jobs lost in March 2020, 60% impacted women. With job losses in March falling disproportionately on women, women no longer surpass men on U.S. company payrolls. This is not the first time that women’s careers have been derailed due to layoffs. During the Great Recession from 2007-2009, 12.5% of women lost their jobs, compared with only 8.8% of men.
Pay Gap Adds to Problems
Even before this crisis, women were paid less than men, and as a result, women contribute less to their 401(k)s than men. According to the 2019 T. Rowe Price Retirement Savings and Spending study, millennial women are contributing only 6% of their salaries to their 401(k), versus 8% for men. The percentage improves slightly for boomers, but women still trail their male peers, saving only 8% versus 10%. It remains to be seen if those savings figures will decline, and if the gap will widen in 2020, due to the pandemic.
The harsh reality is that because women are paid less than men, they have less in savings and fewer dollars to fund their golden years. According to the 2019 Bank of America Merrill Lynch Workplace Benefits Report, women come to retirement with $70,000 less than men. The severity of the situation becomes apparent when you realize that women live an average of five years longer than men and have significantly higher medical costs in older age. If anything, women should be starting retirement with much more padding in their nest eggs.
While the CARES Act offers immediate relief in the form of allowing Americans to withdraw up to $100,000 from a retirement account (IRA, 401(k), etc.) without having to pay a 10% penalty, doing so is even more dangerous for women. As we’ve seen, women are already behind financially. Taking money out of your retirement account leaves less for the future and locks in your losses, as most retirement plans have taken a hit due to recent market declines. The dollars that you take out now to pay current bills will miss out on the market recovery that we expect over the next several years. This is a Band-Aid solution that does not address the real issues and realities that make women economically vulnerable.
Practical Advice for Women Right Now
Hopefully, this will eventually return to normal. However, the heightened financial stress that COVID-19 has placed on women can serve as a catalyst for incorporating healthier financial practices. For example:
- Cut unnecessary expenses, such as subscription services or services you’ve learned to do on your own while in quarantine.
- If you’re planning on purchasing any big-ticket items this year, make sure you look at multiple companies and do your research on the best prices.
- And maybe most important, begin tracking your new monthly expenses. You want to be aware of where your money is going so that you can eventually have more control over where you want your money to go.
While COVID-19 has exposed that systematic gender-inequality persists in the workplace, we can still act on things within our control to better prepare for our financial future.

Stacy is a nationally recognized financial expert and the President and CEO of Francis Financial Inc., which she founded 15 years ago. She is a Certified Financial Planner® (CFP®) and Certified Divorce Financial Analyst® (CDFA®) who provides advice to women going through transitions, such as divorce, widowhood and sudden wealth. She is also the founder of Savvy Ladies™, a nonprofit that has provided free personal finance education and resources to over 15,000 women.
-
How to Buy Stocks
Not everyone knows how to buy stocks, even as investing in the stock market becomes more and more popular. This four-step plan can help.
By Will Ashworth Published
-
One Key Rule for Understanding 2023 RMDs
RMDs Required minimum distribution (RMD) rules can be confusing, but there is a guideline that can help.
By Kelley R. Taylor Published
-
Five Simple Year-End Tax Tips to Set Up a Successful 2024
If you wait until the new year, you may miss out on some valuable tax planning strategies. Here’s what you need to know before closing out 2023.
By Julie Virta, CFP®, CFA, CTFA Published
-
Six Estate Planning Tips for Younger Generations
Millennials and Gen Zers are taking their estate planning seriously. These tips can help make the process seem less daunting.
By David Weinstock, CFP®, AEP®, CPA Published
-
Year-End Tax Planning for a Financially Healthier Retirement
Getting your tax ducks in a row for the end of the year can decrease your tax liability and make the most of your income, now and in retirement.
By Ryan Marston, Investment Adviser Representative Published
-
Where to Start Financially After a Life-Changing Diagnosis
Dealing with an illness, yours or your child’s or that of another loved one, is hard enough without adding financial duress. Here are some considerations and suggestions for covering expenses.
By Stephen B. Dunbar III, JD, CLU Published
-
Six Ways to Prepare for Widowhood and Protect the Surviving Spouse
No one wants to have to plan for losing their spouse, but having plans in place and knowing what to do when the time comes can alleviate at least some of the stress.
By Tyler Hill, Investment Adviser Representative Published
-
Creating a Blended Family? Three Key Steps to Consider
Blended families can make your finances and estate extra complicated, but you can head off some of those issues with careful planning.
By Adam Frank Published
-
Do You Need Disability Insurance?
If you work for a living, the answer is yes, so don’t overlook protecting your biggest asset. Open enrollment season is the perfect time to assess your options.
By Frank J. Legan Published
-
Retirement Planning in a Time of Inflation and High Interest Rates
Today’s challenges make retirement planning even more complicated than usual, but it’s not all doom and gloom.
By Ken Moraif, MBA, CFP®, CRPC® Published