Why More Women Will Have a Retirement Savings Shortfall During the Pandemic
31st Aug 2021
- Nearly 80% of women say their workloads have increased because of the pandemic
- 51% of women who started their businesses last year were the sole provider for their household
- Defined Benefit and Cash Balance plans help self-employed professionals and small business owners speed up retirement savings – averaging $100,000+ annually.
The COVID-19 pandemic has forced many women to put retirement on the back burner. Since February 2020, more than 2.3 million women have left the workforce bringing their labor force rate down to levels from three decades ago. More than 40% of women are focused on day-to-day finances versus saving for the future and retirement.
Women Face More Pressure During Pandemic
Women have faced more pressure during the pandemic navigating work and household duties. Research shows that women have seen an increase in workloads at work and home: In a survey of 5,000 women across 10 countries, nearly 80% of women say their workloads have increased because of the pandemic, while 66% of women reported having more responsibilities at home. The additional pressure has made women more anxious, unhappy and discouraged. Women also are more likely to run out of retirement savings, especially because older women are more likely to outlive their spouses.
More Women Are Launching Small Businesses
More women have started small businesses during the health crisis. This trend is supported with research from companies like Gusto, a human resource tech company. Itpartnered with National Association of Business Owners to conduct a joint survey of 1,199 women business owners. It found that nearly half of businesses started by women in the past year were minority-owned and these businesses were started out of need. The survey also found that 51% of women who started their businesses last year were either the sole provider for their household or the primary bread winner.
How Women Can Become Good Investors and Save for the Future
If you’re self-employed or a small business owner, a Defined Benefit or Cash Balance plan can accelerate your retirement savings by allowing you to make high-deductible contributions that help you save big on taxes. One of our clients, a 48-year-old manufacturing salesperson, quit her job and launched her own bilingual digital marketing business. She earned $250,000 and will contribute $93,200 to a Defined Benefit plan. The client will save $34,500 a year in taxes and has an estimated accumulation of $1.9 million at the end of the plan. Run a free estimate to see how much you can save for retirement with a Defined Benefit or Cash Balance plan.