Women are still behind men when it comes to retirement savings. What they can do to build security

Women are more worried than men when it comes to saving enough for retirement.

The coronavirus pandemic hasn’t helped.

Some 60% of women said they were concerned they wouldn’t be able to achieve a financially secure retirement, according to a February 2021 survey from the National Institute on Retirement Security. That’s compared with 51% of men (still a daunting number) who said the same.

Women were also more likely to say that an employer-sponsored plan alone wasn’t enough to save for retirement, according to the survey. Women also said that saving for retirement has only gotten harder, citing things such as the rising costs of long-term care, wage stagnation, lack of pensions, greater debt and little help when it comes to saving for retirement.

“When you look at women’s views towards retirement, they are a bit more pessimistic about their own situations and also the ability of others to save enough for retirement,” said Dan Doonan, executive director of the National Institute on Retirement Security. “They also seem to have a better handle on the fact that retirement’s getting more challenging over time.”

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The Covid impact

The gap between what men and women have saved for retirement has long been documented. In 2016, the median household income for women 65 and older was $47,244, including earnings and income from retirement, property and Social Security, according to a May 2020 paper from the National Institute on Retirement Security. For men 65 and older, the figure was $57,144.

There are many things that contribute to a gender gap in retirement savings. Women, for example, still generally make less than men and take more time out of the workforce to care for children or family. Women also tend to outlive men, meaning they need more savings in their later years.

“Some of this is outside of retirement infrastructure. The wage gap continues to exist between men and women, and it follows women into retirement,” said Doonan.

The coronavirus pandemic has likely made the existing gender gap between retirement savings worse, as women have been more likely to lose jobs due to overrepresentation in industries hit hardest or have left the workforce to care for children or other family members.

Women have been regaining jobs much slower than men in the pandemic recovery. In August, women gained 28,000 jobs while 207,000 men found new work, according to the Labor Department. About 39% of unemployed women have been out of work for six months or more, and more than 25% of unemployed women have been out of work for more than a year.

All of these things negatively impact the ability to save for retirement.

To be sure, pausing or saving less for retirement during the pandemic because you’ve lost your job, some of your income or had any other change in circumstance is OK. It is possible to get back on track and rebuild your retirement savings.

“In the short term, it is OK if you have to adjust,” said Marguerita Cheng, a certified financial planner and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.

One way is to continue to make any contributions you can to your 401(k), or an individual retirement account if you’ve lost your job and access to employer-sponsored plans, said Kelly DiGonzini, CFP, director of financial planning at Beacon Pointe, an independent advisory firm in Newport Beach, California.

Any amount that you’re able to invest will grow over time aided by the stock market. “The market has been going up like crazy,” DiGonzini said.

If you can’t save consistently, allocating part of windfalls such as a stimulus check or tax refund is a good way to contribute to retirement, said Cheng, who is a member of the CNBC Advisor Council.

Women should also focus on spending and living within their means, said Shweta Lawande, a CFP and analyst at Francis Financial, a New York-based firm dedicated to serving women, couples and those experiencing divorce.

“What we’re trying to share with our clients in this time is to focus on what they can control,” Lawande said. While they can’t control lockdowns or the job market, they can make sure their budgets are airtight, she added.

And, those with an existing portfolio can take some time to check their asset allocations to ensure they’re invested in a diverse group of stocks, bonds, real estate, cash and more, said Lawande, adding that it reduces risk.  

“Even in a year like 2020, we saw the benefits of our clients who have stayed invested in the market and diversified,” she said.

Working with a financial advisor, if possible, can also help women make sure they’re on track to retire when they’d like to and to formulate a strategy to course correct if they’re not.

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.