Women were hit hardest by COVID financial setbacks

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We know that women have been hurt the most financially since the arrival of COVID-19 in early 2020. Roughly 2 million women have left the labor force to protect their loved ones from illness, home-school children to learn remotely, or care for elderly parents. This meant the loss of almost two years of earnings, as well as retirement savings, leaving them further behind.

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A report released in October by the Transamerica Center for Retirement Studies showed that this is turning into more concerns among women (as well as men) about their financial future. Transamerica has published the study based on surveys of workers over 21 years. The report focuses on women’s health, finances and retirement outlook in the wake of COVID-19.

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The findings provide some reason for optimism: Most of the women and men surveyed by TransAmerica were happy with their lives and were confident they would reach their financial goals, including a comfortable retirement. And a solid majority continued to fund their retirement accounts, even as businesses closed, states and cities went into lockdown, and hundreds of thousands of Americans died from COVID-19.

“It is remarkable that such a high percentage, four out of five workers, continue to save for retirement – ​​even in the darkest of times, or [during] Let’s hope the economy and the pandemic have had the darkest of times,” said Katherine Collinson, chief executive and president of the Transamerica Institute, a non-profit private foundation that oversees the study.

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But the pandemic wreaked havoc. The TransAmerica survey found:

The survey was conducted online by The Harris Poll and found over 3,000 respondents, 55% of whom were men. The survey was conducted late last year among full-time employees at for-profit corporations, so it didn’t capture the views of self-employed people or those outside the workforce. Collinson said Transamerica has polluters in the area for now to update the findings.

In an interview, Collinson told me that COVID did not so much create new problems for female workers as it exacerbated already existing inequalities.

“The pandemic has been difficult for both women and men,” she said. “But as we look at the setbacks that women have faced, it means that what was already a very difficult mountain to climb has become even taller.”

And even in cases where women and men expressed similar concerns about retirement preparation or financial setbacks, “because women were already in a more vulnerable position before the pandemic, these setbacks, or these negative experiences.” , making it more difficult for them to recover than men. , even if we look at percentages somewhat similar,” she said.

Their differing life experiences—primarily raising children, which still falls disproportionately on women—contribute directly to the gap in retirement savings and the standard of living those savings can support in retirement. .

“Women are more likely to take time off from the workforce and, in doing so, give up income and employer benefits and Social Security credits when they take time off to parent and care. And statistically, women are more likely than men to live longer, which means we need to save for retirement even more,’ said Collinson.

She advises women and men to take some simple steps to stay or get back on track financially.

First make a budget. “A really important starting point is knowing where you stand financially and assessing your situation and creating a budget is a really important first step,” she said.

Next, make building a healthy emergency fund a priority. “It is really important that people have emergency savings to aid them through any major financial setbacks, and if we have learned anything in the pandemic it is [that] Financial shocks can happen at any time.”

Finally, she said, “formally estimate your retirement savings needs, use a retirement calculator, check with your retirement planning provider, weigh in with a financial advisor.” If your goal is financial security in retirement, you need to know how much you need.

We cannot stop aging and we cannot stop the epidemic. But we can be prepared and know where we stand. This is great advice for anyone, male or female, in a world where uncertainty rules.

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