According to a story written by Kelly LaVigne, J.D. Vice President, Advanced Markets, Allianz Life the Pandemic has changed women’s views on retirement.
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.
According to the Allianz Life 2021 Women,
Money and Power Study 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+, 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%), 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.
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.
All the unknowns of the pandemic made planning for a
retirement date (or planning for anything) a 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.
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.
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.
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.
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