The latest edition of a yearly Nationwide study shows that women are more worried than ever about their ability to retire.
No time to read? Watch our video overview:
The pandemic accelerated a trend that was already happening – and we need to take action to help reverse it. In previous years of the Nationwide Advisor Authority survey, the women surveyed were less confident than men in their ability to retire comfortably. The pandemic has, predictably, made that fear much worse.
Women and the Pandemic
Would it surprise you to know that women have taken harder financial hits due to the pandemic than men? Here are just a few reasons why that’s the case:
- More women are unemployed than men, largely because the service professions hit hardest (retail and hospitality) employ more women. According to the US Bureau of Labor Statistics, beginning in April 2020 and continuing through September, the unemployment rate for women spiked higher than it did for men. Women of color are hardest hit within that group, according to a McKinsey study (Women in the Workplace 2020). Black and Hispanic women both had higher unemployment rates than white women as of November 2020. (Federal Reserve Bank of St. Louis)
- More working women than men have cut back their work hours to care for kids who can’t go to daycare or in-person schools. According to McKinsey, 1 in 4 women were considering giving up work, cutting hours, or changing jobs due to increased caretaking responsibilities. This is the first time in the survey’s five years of existence that there’s been a difference in the rate at which men and women left their jobs.
- Moms are 3x more likely than dads to be responsible for housework and caregiving, according to McKinsey. The pandemic has only increased these responsibilities, what with everyone home all day. What’s even worse – men and women don’t seem to agree on the amount of household work they’re doing. Over 70% of dads say they’re splitting the housework with their partner during the pandemic, but only 44% of moms say the same. (McKinsey)
36% of women surveyed are making less money due to COVID, compared to 29% of men.
Jobs and the Pandemic
As if caring for their families and their health isn’t enough, women’s job stress has skyrocketed during the pandemic. That might seem counter-intuitive, what with the benefits of working from home – for those who can, that is. But things like performance reviews, mental health, and burnout cause so much stress that the comforts of home can't make up for it.
- Less than 33% of employers have adjusted performance review criteria to take the pandemic into account. That means almost 70% of employers are adding stress to employees’ lives as they try to deal with working from home – with the kids – all day long. (McKinsey)
- About 42% of workers have depression, anxiety, or burnout. That’s according to a 2020 survey performed by Headspace, a meditation app.
- 56% of women don’t think their mental health is a priority for their employer. That’s quite a bit more than the 41% of men who answered similarly. (Headspace)
41% of women surveyed work with a financial advisor, compared to 54% of men.
What the Survey Revealed
Okay, so now we know the lay of the land in general. But what did that Nationwide survey tell us specifically about women and their finances?
In 2019, 60% of women surveyed were worried about a recession. In 2020, that number rose to a whopping 82%. Similarly, in 2019, 57% were worried about a coming bear market. In 2020, that number jumped to 74%.
Those numbers are huge.
Women’s biggest worry? Portfolio losses due to COVID-19 and protecting assets. A massive 72% of women surveyed said the pandemic has already had a negative impact on their retirement savings.
72% of women surveyed are investing for retirement, compared to 65% of men.
What We Can Do
The first step is simply reaching out. Email or call your female clients and ask how they’re doing. Ask if they have questions – but be aware they’re probably juggling too many tasks to stop and have a conversation when they pick up the phone. Offer an appointment for a call or video chat at their convenience. Make sure they know there are no silly questions - you're here for all of them.
Once you check in, there are two things we can do:
- Be good human beings and offer support where and how we can. If you have clients struggling with childcare, for example, don’t just sit there and do nothing. Because you talk to a lot of people, you can be helpful in ways you probably didn’t expect. Ask your other clients and your social network what resources they’re using to cope, and start relaying information and helpful resources as best you can. Your clients will remember that you were there when they needed help.
- Be good advisors and offer targeted suggestions that address your client’s specific financial fears. The stats we shared above are just that – stats. Your female clients may be part of them; they may not. You have to reach out and have a conversation to find out for sure. If they are feeling those financial pressures, that’s your cue to take action. Talk about what they need now, as well as what they need in the future. Ask them if their financial situation has already changed since you spoke last, and advise them on what steps to take.
36% of the women surveyed said they’re investing for additional income, compared to 48% of men.
Once you talk through the basics, bring up the silver lining: our industry was created to solve problems just like this. There’s a lot you can do to help.
- Are her beneficiaries up-to-date? Now’s a great time for a check-up if your client already has life insurance. Are her beneficiaries current? Is she the beneficiary of her spouse’s policy? If there’s a trust, does she know who all those trustees are? Is their information current?
- Has her income dropped…along with her tax bracket? It might be a good time to consider a Roth IRA conversion because being a lower tax bracket means she’ll pay less tax upon conversion. And if you read Van Mueller’s monthly newsletters, you know why it’s a good idea to convert that 401(k) and pay taxes now instead of later.
- Does she want security and dependable retirement income? Annuities are going to be part of the conversation. The Nationwide survey revealed that more women than men rely on fixed annuities – and fewer women than men own products like fixed indexed annuities or registered index linked annuities. This might be due to the latter’s complexity, but it might also be because not enough agents do a good job of explaining these products. If you need help with this, reach out – our brokerage managers are here to help.
- Does she want to protect her family with life insurance but can’t afford it right now? There are several options for juggling an unstable budget. Is it possible to pause retirement account contributions and use that money for buy a policy? When the situation improves, she can resume those contributions and her family will be protected. There may be other options to squeeze more cash out of a tight budget. Try refinancing a mortgage, cutting unnecessary apps and services, and working with creditors to reduce monthly payments during this hardship. They’re not always pretty options, but if it’s a question of going without coverage or making this effort, it’s worth bringing up.
That's our quick look at how COVID has affected women and money!
How has it affected your female clients? What concerns have they brought up when you talked with them?