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Third of Women Say It Will Take a Year or Longer to Financially Recover From COVID-19

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What You Need to Know

  • Women of color anticipate it could take them an average of six years for their finances to rebound.
  • Ric Edelman and HerMoney media CEO Jean Chatzky will hold a free webinar focused on women and money on Tuesday.
  • Just 27% of women seek advice from financial advisors vs. 36% who receive advice from their parents.

A recent survey highlights the difficulties faced by women due to the pandemic — particularly women of color.

The vast majority of women surveyed recently for Edelman Financial Engines, 71%, say COVID-19 has affected their financial situation. Moreover, one in three expect it could take a year or more to recover from the impact, and women of color anticipate it could take them an average of six years to do so. 

The poll of 1,000 women, conducted by Wakefield Research, also found that most women 61% experienced significant adverse financial events during the pandemic. Over the past year or so, 26% had to take money from their savings or investments, 19% lost their jobs or had their pay cut; and 18% incurred health care expenses.

Half (51%) of women are more worried than they were before the pandemic and 26% are much more worried about achieving financial milestones. Women (37%) are more likely than men (29%) to be concerned about increasing emergency savings.

Women “are facing economic and financial challenges right now in the pandemic that have set them back,” Edelman Financial Engines Founder Ric Edelman said in an interview. “Industries hard hit by the pandemic are those that employ more women than men such as travel, hospitality and retail.” 

Nonetheless, relatively few women seek advice from financial advisors, 27%. More have received advice from their parents, 36%.

In general, financial planning is a women’s issue for several reasons, including the gender gap in pay and the fact that women spend less time in the workforce mainly due to the demand for child and elder care, according to Edelman. 

“Overall, this means women accumulate less for retirement savings and receive less in Social Security benefits,” he explained. 

Another important fact, Edelman says, is that the average wife gets more in Social Security benefits by being the spouse of a worker than by being a worker. Plus, women outlive men by five years on average.  

“They accumulate less money for retirement,” he noted. “But they need more money, because they need it to last longer.”

“All of this makes financial planning a critical woman’s issue” and underscores the need for women to have “crucial conversations” around retirement, savings and investing, Edelman explained, adding that “most women are acutely aware of all these issues.”

Online Event, Focus

To support the financial education of women, Edelman and HerMoney media CEO Jean Chatzky will hold a free webinar, “The Truth About Women & Money,” at 3 and 8 p.m. Eastern on Tuesday.

“This is an inflection point, not the end of the road for women,” Chatzky said in an interview.

“I am optimistic as you look at educational trends, the number of women who start businesses and the levels of the intergenerational transfer of wealth [from parents and spouses],” she explained.

Overall, “the amount of power and resources in the hands of women, despite this glitch, … will continue … to move in the right direction,” she added.

The HerMoney website, Chatzky points out, includes a link to the matching service Wealthramp, so women who want to work with a financial advisor can find one.

“I am heartened that there are more ways to access and use financial advisors today than at any point in the past,” she said. “Whether figuring out how to solve a short-term problem or … doing the right things on the road to retirement, the resources are now available at an assortment of price points and engagement levels.” 

In general, women are “more engaged in personal finances and are better investors than men,” Edelman said, mainly because they are patient and “don’t pretend to have all the answers.”

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