One in three Americans expects to delay their retirement because of the pandemic as of March, according to the study. In a hopeful sign, although 22 million Americans stopped making monthly retirement contributions by December, that dropped to 14 million as of March.
Among households ages 45-54, 42% do not have any retirement savings, and the median retirement balance is $100,000.
“While retirement was already transforming before COVID-19, the pandemic has accelerated key retirement trends, disrupting retirement as we know it,” according to the report’s authors. That impact is not borne equally among Americans.
“The financial fallout from the pandemic has been unequally distributed,” the report’s authors wrote. “Many Americans have benefited from a financial boom, while millions of those earning the least have suffered financially and emotionally from job and income loss.”
Women already faced a $469,000 gap in lifetime earnings on average.
That gulf doubles to more than $1 million when their career is disrupted.
Boomer women have spent an average of eight years out of the workforce from ages 18-52, according to the report. Women also retire an average of two years earlier than men.
The researchers illustrated how the career disruption can add up to $1 million, with an example of a woman who stopped working between the ages of 28 to 35 as she cared for children until they entered kindergarten. She continues her mid-career until 55, when she cares for an elderly relative until she jumps back to full time work at 58.
Not only did she lose income and promotion opportunities, she also has less in pension and Social Security – for a grand total of $1.1 million.
The earnings gap is even wider for Blacks and Latinos.
During the “she-cession,” women left the workforce in greater numbers during the pandemic either through displacement or caring for family members, including homeschooling children and caring for elderly relatives.
Nearly a third (31%) of women active in the labor force said the pandemic hurt their job security, compared to only 23% of men, according to the report. The gap was more glaring for pre-retirees, with 39% women losing some job security compared to 20% of men.
All those disadvantages lead to fewer dollars to put aside, with only 41% of women saving each month for retirement, compared to 58% of men.
While men have regained a dash of confidence in retirement since May 2020, women have been losing confidence.
“In stark contrast, women’s retirement savings confidence dropped and has not rebounded, remaining alarmingly low,” according to the report. “Among pre-retirees, the confidence gender gap is even wider (35% for women vs. 56% for men).”
Retirement accounts for women are 67% than that of men. Those fewer dollars will have to stretch a longer way as women typically live five years longer and retire earlier.
Although financial security was the most wobbly pillar of retirement during the pandemic, Americans came to value family and friends even more during the pandemic. In fact, it was the only one to have increased over pre-pandemic levels.
That emphasis on family and friends would be well-placed, according to retirees, with 94% of them saying “how to maintain or improve family relationships” is important. That is in stark contrast with the mere 12% of pre-retirees saying they think about it.
“Another encouraging sign is that the majority of Americans now say there is a silver lining to the pandemic: 76% credit it with causing them to ‘refocus on what’s most important in life,’” the researchers wrote. “This sentiment held true across age, gender, race/ethnicity, income and region of the country.”
Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected]