We’re back with another edition of ClearPath – Your Roadmap to Health & Wealth. I’m your host, Al Waller. 2020 marks the 100th anniversary of women’s right to vote in the United States. Since then, women have made great strides in educational achievement and career opportunities. Despite this progress, they continue to be at greater risk than men of not achieving a financially secure retirement due to obstacles such as lower pay and time out of the workforce for parenting or caregiving. Catherine Collinson, president of nonprofit Transamerica Center for Retirement Studies is joining us to share her insights.
To begin with, can you talk a bit about how the pandemic has impacted women’s retirement outlook in particular?
We recently examined women’s finances before and during the pandemic, and their expectations about retirement. As of June, we found that 24 percent of women say their confidence in their ability to retire comfortably has declined in light of the coronavirus pandemic. In fact, only 17 percent of women are “very confident” that they will be able to retire with a comfortable lifestyle.
Wow. Many people have been hit hard financially by the pandemic by experiencing negative employment impacts like layoffs, furloughs, or reductions in pay. This is a real setback and can prevent people from saving enough money for retirement. What are some tips you have for women to improve their retirement outlook?
Although the pandemic has made just about everything more challenging, it is important to keep the future and retirement in mind.
• The first thing I recommend is to assess your current financial situation and create a budget. This should include living expenses, paying off debt, and other financial goals such as building emergency savings and long-term retirement savings.
• After creating a budget, see if it is possible to save for retirement. If it is offered, participate in your employer-sponsored retirement plan and take advantage of any matching contributions.
• If you participated in a past employer’s retirement plan, call your HR rep to see the different options you have to roll-over that amount into a new retirement account. Avoid taking loans and early withdrawals from your retirement accounts.
• I also recommend writing down your retirement strategy. Envision your future and use an online calculator to estimate your retirement income and long-term savings needs. Formulate a goal for how much you need to save – and hold yourself accountable.
Those are helpful suggestions, Catherine. Getting educated about finances and different types of retirement accounts has helped me navigate through these difficult times.
That’s a great point. Getting educated about retirement investing and strategies for drawing down savings in retirement is super important. I recommend learning about types of retirement accounts, asset allocation, and dollar-cost averaging. And take advantage of any financial education your employer might offer.
Thanks, as always, for this information, Catherine. It’s been great having you back.
That’s all we have time for here on ClearPath – Your Roadmap to Health and Wealth on WYPR, your NPR news station. Stay safe.