Women lag behind men in saving for retirement. The Covid pandemic made it worse

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When it comes to retirement provision, women save less than men.

The coronavirus pandemic only makes it worse.

Nearly three-quarters, or 72%, of women with investable assets of $ 100,000 or more said the crisis had negatively impacted their ability to retire, according to a survey by the Nationwide Retirement Institute in January.

“It doesn’t help that so many women are now being pulled out of the workforce because of Covid,” said certified financial planner Zaneilia Harris, president of the Harris & Harris Wealth Management Group, based in the Washington metropolitan area.

According to the National Women’s Law Center, as of February 2020, more than 2.3 million women have left the workforce, cutting their labor force participation levels to levels not seen in more than three decades.

We need to give ourselves permission to make ourselves a priority.

Zaneilia Harris

President of the Harris & Harris Wealth Management Group

The pre-pandemic numbers already indicated a gap between men and women. A 2019 Merrill Lynch Workplace Benefits Report by Bank of America found that women retire on $ 70,000 less than men. Almost one in five has saved nothing, according to a survey by CNBC / Survey Monkey Women at Work from 2020.

Yet women survive men.

“I don’t know if it’s a conscious thing, but we don’t encourage women to think about money the way we often encourage men to think about money,” said Heather Zepeda, executive director of Northwestern Mutual in Washington.

“The side effect of this is that women are often left out of really important financial talks.”

Here’s what women can do to boost their retirement savings.

Start with the basics

The first thing you should do is get a handle on your financial situation. Take a month to analyze where and why you are spending your money.

This could help expose inefficiencies, Zepeda said. You can then tighten your budget.

Pay yourself first

Women often tend to spend their money on their families and take a back seat to retirement, Harris said.

“We’ll sit down last,” she said. “Everyone else comes first.

“We have to give ourselves permission to make ourselves a priority.”

The most successful savers are those who put the money into savings first and then pay the bills with the rest, Zepeda added. In other words, treat the savings contribution as an invoice.


When you retire, try to have money in a traditional individual retirement account and / or 401 (k), Roth IRA and / or 401 (k) and investment account, Harris said.

“You want money in different buckets to draw from,” she said.

Try to have at least the employer’s match in your 401 (k) or 403 (b) contribute if that’s an option. For those who don’t have a 401 (k), contribute to an IRA. You can also transfer 401 (k) balances from a previous employer’s plan to an IRA.

You have to decide whether you want to be taxed now or later, which depends on your income level and your specific tax situation. Contributions to traditional 401 (k) plans and IRAs are paid pre-tax, which means you pay tax when you withdraw the money in retirement.

After-tax contributions can be paid into a Roth IRA, but there are income limits. If you’re married and filing together, you can contribute a maximum of $ 6,000 (or $ 7,000 if you are 50 or older) if you make less than $ 198,000. If you’re single, you must be making less than $ 125,000.

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If your company has a Roth 401 (k) that has post-tax contributions, take advantage of that, especially as you near retirement, Harris advised. There are no income limits.

If you need a base of income then consider an annuity, Harris said. Annuities provide the annuitant with guaranteed payments once he or she retires.

Gradually increase the contributions

If you get an increase in the cost of living on your paycheck, increase your pension contributions by 1% to 2%, suggested Harris.

You have a greater chance of saving when you receive a raise.

“Women need to ask for more money,” she said. “We have to value ourselves.”

If your income increases by 20%, you should invest 5% to 8% of that in your retirement savings.

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