How the pandemic hurt (and helped) women financially |  Family finances

How the pandemic hurt (and helped) women financially | Family finances

The pandemic has changed virtually every aspect of our lives in ways both big and small – and finances are no exception, especially for women who are more likely to take on care responsibilities and who were already facing a significant gender pay gap before 2020.

For women, the pandemic has brought both positive and negative changes.

While the experiences varied, Emily Irwin, senior director of advice at Wells Fargo Advisors, says, “The common thread is that the women remained nimble and were very determined to re-evaluate their goals and priorities, and they demonstrated creative about how they will achieve them, now and in the future.”

Here is a look at some of the changes women have faced in terms of their experiences:

Many women who lost their jobs during the pandemic have still not returned…

This disparity reflects larger layoffs at the height of the pandemic among hospitality staff, childcare workers and retail workers, roles that were traditionally more likely to be filled by older workers. women, says Isabel Barrow, director of financial planning at Edelman Financial Engines.

“Financially, while there have ultimately been federal and state programs to mitigate some of the financial impact, there remains a lack of job security, benefits and long-term opportunities for women. in these areas of work,” adds Barrow.

… But those who have remained in the labor market earn more money.

Inflation and a tight labor market are driving up wages across the board. Women’s wages have risen an average of 5.6% over the past three months, according to the Federal Reserve Bank of Atlanta’s wage tracker. This is lower than the 6.5% for men, but still represents a significant increase.

Along with having more bargaining power over their wages, women also find themselves in a better position to negotiate greater workplace flexibility, says Lisa Featherngill, national director of wealth planning at Comerica Bank.

“The pandemic has opened employers’ eyes to the fact that we need to give people flexibility in a way that works for them,” she adds.

Only a third of women are confident in their retirement plans…

And about one in five women actually intended to retire later due to the pandemic, according to the Nationwide Retirement Institute. Meanwhile, Allianz Life’s 2022 Retirement Risk Preparedness Study found that women are less confident in their ability to financially support all the things they want to do in life (73% vs. 88% for men) and more likely to fear running out of money. money than men (61% for women against 53% for men) than death (respectively 39% against 47%).

“This level of concern is not a major surprise, as most events that cause significant financial disruption tend to weigh more heavily on women – especially when it comes to managing family finances,” Aimee says. Johnson, regional vice president and retired consultant for Allianz. . “Whether it’s adjusting the household budget, managing new costs associated with child care, or meeting the costs of caring for an elderly or ill family member, these challenges tend to fall more heavily on women.”

The pandemic has exacerbated this trend for many families and women, she adds.

… But women are more interested in investing than they used to be

More than two-thirds of women are now investing outside of their retirement accounts, up from 44% in 2018, according to Fidelity.

“The financial challenges of the pandemic have created an awareness and urgency that we need to pay greater attention to our financial planning,” says Barrow. “In some cases, this was due to the need to fall back on an emergency fund or go into debt. In other cases, he was trying to figure out what to do with the extra stimulus money from reduced spending due to not eating out, shopping or traveling.

Nearly half of women say money has an impact on their mental and physical health…

And 36% worry about their day-to-day financial health, according to Ellevest. For those in the position, it’s an opportunity to make change, says Johnson.

“Whether or not they have experienced a significant financial impact over the past two years, women should use this experience to determine whether they can weather unexpected financial storms and understand how prepared they truly are for the future,” she adds.

… But nearly three-quarters are taking a more active approach to their finances.

According to Nationwide, two-thirds of female investors work with a financial advisor to gain confidence in their own investments. Working with a financial planner can help women reach their financial goals and avoid falling into pre-pandemic financial habits.

“While it’s tempting to increase your standard of living and spend more as you earn more, it’s even more important that you save appropriately because you’ll want those savings later in life,” says Barrow. “Whether it is due to increased longevity or the financial burden placed on women, it is vital that women make their money and financial security a priority.”

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