If you haven’t seen the headlines about the disproportionate economic and career impacts that the COVID-19 pandemic dealt women, you might have been living under a rock for the past year and a half. As some of the biggest impacts from the pandemic fade, women are indeed slowly returning to the workforce, but new data indicates that many are still taking a backseat when it comes to their finances.
Compared to two years ago, women are less likely to consider themselves to be the CFO of their household (41% in 2021 vs. 47% in 2019), and also less likely have primary or equally shared responsibility for managing finances and making financial decisions (84% vs. 90%), according to the Allianz Life 2021 Women, Money and Power Study.* They are also less likely to say they have more earning power than ever before (36% vs. 42%). These are marked declines in a short time frame.
When it comes to retirement planning, the picture isn’t much better. Women say they are focused more on short-term finances, rather than longer-term priorities, such as saving for retirement, with 42% saying, “I can’t even think about saving for retirement right now, I’m just trying to take care of day-to-day expenses.” Additionally, since the pandemic began, over half (51%) say they are paying a lot more attention to what they are saving and spending, but only 35% have put more thought into their retirement plan.
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.
For women who are feeling un-engaged in their finances, and even less so when it comes to retirement planning, it’s not too late to get back on track. Here are a few ideas to put women’s finances top of mind.
Revisit your retirement timeline
All the unknowns of the pandemic made planning for a retirement date (or planning for anything) a real challenge. According to the study, 21% said that the pandemic pushed their retirement plans back, while 18% said it accelerated their plans. If you fall into either of these categories and your plans have changed, that’s OK. The next step would be to see how these changes might pose a risk to your financial plan
If you’ve decided to retire earlier than planned, you may need to temporarily boost the amount you’re putting toward your retirement savings to help close the gap. You’ll also want to check in to make sure that you have a plan to fund those extra years of retirement.
Retiring later than you originally planned, while it may not be the most fun thing to consider, can be an effective way to get your finances back on track because you have more time to save and to earn returns on retirement savings and investments. Of course there are benefits for delaying Social Security payments as well.
Find the right financial professional
While the benefits of working with a financial professional are many, one important factor to consider for women is that it can help them feel more confident and prepared for their financial future. The study showed us that 85% say they feel better able to handle life’s curveballs (hello, global pandemic) by working with a financial professional. Further, 77% of those who currently have a financial professional feel they were able to better adjust to the impacts of the pandemic.
Despite these benefits, almost a third (29%) of women indicate they have never used a financial professional, but would consider using one in the future, and only 26% say they are currently working with one.
If you don’t already have a financial professional, speak with friends and family (particularly other women) who can recommend a financial professional they like and trust. Sometimes word of mouth is the best referral.
Playing catch-up
For the 42% of women who say they aren’t even thinking about retirement, or those who have hit pause on saving or may have quit or lost a job with a 401(k) match program, it’s important to start saving again in any amount you can. Any contributions you can make will help you catch up, and when you look at the bigger picture with investments compounding, you’ll feel better about putting even the smallest amounts away.
You can also consider revisiting your risk tolerance with the help of a financial professional to help you explore the potential for higher returns and make up lost ground.
Making the most of it
The pandemic upended so many aspects of everyone’s lives, and put years of financial progress for women at risk. Despite these challenges, remember that retirement planning can’t go to the wayside any longer. Now is the time for women to get engaged with their finances again, and play a proactive role in managing risks to their retirement security.
* The Allianz Life Women, Money, and Power Study was commissioned by Allianz Life Insurance Company of North America via an online survey in May 2021 with a nationally representative sample of 900 women, ages 18+.
-
Social Security Will Continue Sending Paper Checks Sparingly, Reversing CourseThe Social Security Administration has backed off from plans to eliminate paper checks. However, it will only send checks in the mail as a matter of last resort.
-
Ask the Editor — Tax Questions on Four New Tax DeductionsAsk the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on four new tax deductions in the "One Big Beautiful Bill."
-
How Divorced Retirees Can Maximize Their Social Security Benefits: A Case StudySusan discovered several years after she filed for Social Security that she is eligible to receive benefits based on her ex-spouse's earnings record. This case study explains how her new benefits are calculated and what her steps are to claim some of the money she missed.
-
From Piggy Banks to Portfolios: A Financial Planner's Guide to Talking to Your Kids About Money at Every AgeFrom toddlers to young adults, all kids can benefit from open conversations with their parents about spending and saving. Here's what to talk about — and when.
-
I'm an Investment Pro: Here's How Alternatives Could Inject Stability and Growth Into Your PortfolioAlternative investments can often avoid the impact of volatility, counterbalancing the ups and downs of stocks and bonds during times of market stress.
-
A Financial Planner's Guide to Unlocking the Power of a 529 Plan529 plans are still the gold standard for saving for college, especially for affluent families, though they are most effective when combined with other financial tools for a comprehensive strategy.
-
An Investment Strategist Takes a Practical Look at Alternative InvestmentsAlternatives can play an important role in a portfolio by offering different exposures and goals, but investors should carefully consider their complexity, costs, taxes and liquidity. Here's an alts primer.
-
Ready to Retire? Your Five-Year Business Exit StrategyIf you're a business owner looking to sell and retire, it can take years to complete the process. Use this five-year timeline to prepare and stay on track.
-
A Financial Planner's Prescription for the Headache of Multiple Retirement AccountsHaving a bunch of retirement accounts can cause unnecessary complications. Consolidation can make it easier to manage your savings and potentially improve investment outcomes.
-
Overpaying for Financial Advice? A Financial Planner's Guide to FeesTake five minutes to review how much you're paying for financial advice. If you're overpaying, you could be better off with an adviser who charges a flat fee.
