Women Can Still Rescue Their Retirement Despite the Pandemic

Well Heeled

Even in the best of times, a woman's path to a secure, well-funded retirement faces challenges including the gender wage gap, years lost to child rearing, and longer life expectancies than men. The emergence of the COVID-19 pandemic has created even more obstacles to retirement security.

"Women are being stretched to their limits, in some instances balancing job responsibilities with home schooling children, and possibly, caregiving for an aging parent or loved one — all of which can negatively impact her long-term financial situation," says a September report from the Transamerica Center for Retirement Studies. A staggering 1 in 4 women say their confidence in their ability to retire comfortably has declined as a result of the pandemic, while only 17% of women in America are "very confident" they'll be able to retire comfortably.

With such startling statistics in mind, Cheapism asked experts around the country to offer ways women can rescue or at least improve their retirement security.

Budget Spending Notebook — Moyo Studio/istockphoto

Revise Your Post-Pandemic Budget

For many women, side-effects of the pandemic such as job loss or reduced work hours have forced less household spending. Extras such as meals at restaurants and entertainment may have ended altogether. Mary Alice Hughes, of Insurance Advantage and LM Financial Services, recommends maintaining the scaled back spending even after the pandemic is behind us and using the savings to contribute more to retirement funds. "Track and budget your spending now in order to build stronger money habits moving forward," says Hughes. "This way, you will be able to allot more funds to retirement accounts in order to secure a stable financial future."

Find Creative Ways to Generate More Income

Look for ways to bring in money even when not fully employed — if you're a pet lover, sign up with dog walking services such as Rover or advertise pet-sitting services online, for instance. "There are limitless ways to bring in extra income depending on your skills, hobbies or abilities," Hughes says. "These funds can be used as a retirement savings contribution until you are back at work full time."

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Keep Contributing to Retirement Plans, Even If Jobless

Though it will depend on your cash flow, you should contribute to a retirement account even when not working. How, exactly, can you do that if you have no employer-sponsored 401(k) plan? If you're married and your spouse or partner is employed, you may be able to contribute through theirs. "A nonworking spouse can contribute up to $6,000 if under age 50 and an extra $1,000 if over age 49 to an IRA, even if it's the working spouse who is covered by retirement plan," says Joyce Streithorst, a certified financial planner and director of financial planning at Frisch Financial Group. "This is a way for both spouses to make retirement plan contributions, even if one has had to step away from the workforce during the pandemic, either voluntarily or not."

Take Only Loans From Retirement Accounts

Less a tip about getting back on track and more about staying on track: Rather than raid a retirement fund and take cash distributions to survive an income loss, try instead to merely borrow from those retirement accounts. "Certain retirement plans allow for loans — such as 401(k), 403(b), and 457 plans," Streithorst says. "If you take a loan, you can then pay yourself back."

Accountants Are Known to Upsell — skynesher/istockphoto

Negotiate, Negotiate, Negotiate

Women tend not to be as comfortable as men negotiating money matters. But when your retirement is on the line, it's time to change that. "You may be able to negotiate with your creditors, such as mortgage lenders and credit card companies, to reduce, postpone, or spread out any payments you owe them, and thus redirect those funds back to your retirement account," says Bryan Stiger, a certified financial planner at Betterment 401(k).

Saving: Coins in a Jar — Farknot_Architect/istockphoto

Reduce Retirement Contributions, Don't Stop Them

Saving money for retirement can seem impossible with less income and competing financial priorities. But putting away even a small amount is better than putting away no money at all. "If you have an employer-sponsored 401(k) and are strapped for funds, it's better to lower your contribution rate than to stop contributing altogether. That way, you'll keep growing your retirement fund and maximizing the power of compound interest," Stiger says.

Woman Taking Notes from Computer — Ridofranz/istockphoto

Make the Most of Annual Catch-Up Contributions

People 50 or older can make annual "catch-up" contributions to 401(k) accounts and IRAs, under IRS law. Ben Reynolds, chief executive and founder of Sure Dividend suggests women who have been sidelined by the pandemic take advantage as soon as possible. "Even if you lost your job, had a salary reduction, or lost hours in 2020 or 2021, you can still catch up," Reynolds says. "If you're in a better position now and can afford it, you can add Up to $1,000 to an IRA and $6,500 to a 401(k)."

Small- or Micro-Cap Stocks — mrtom-uk/istockphoto

Invest

Only a fraction of American women invest in stocks, and many prefer to let others handle their investment plans. "While it's important to work with an investment professional if you're not well-versed, you should still be proactive about what your goals are and get involved in the process. Take time to learn about how investments work," says Deborah Goldberg, finance and insurance expert from the life insurance comparison site Effortless Insurance.

Diversify Your Long-Term Income

Consider investing in alternative assets to help diversify long-term earning potential. "This includes real estate and income-producing properties," says Andrew Luong, chief executive and founder of Doorvest. "It's possible to generate an additional $55,000 in income annually through buying fully renovated homes that have tenants in place." To get started, search online — including on social media — for real estate investment groups. Luong suggests one of the largest resources, called Bigger Pockets.

Business Meeting Advisor — filadendron/istockphoto

Find an Adviser Specializing in Retirement Income

There's a difference between financial advisers who simply help manage a portfolio and those with specific expertise in optimizing retirement income. "If you're worried about retirement, you should meet with a retirement income professional," says financial adviser Mary Lyons, known as the Wealth Woman. "And make sure to interview a potential adviser — asking them what they focus on."

Refinance Student Loans

Interest rates have reached historic lows over the past year or more, and you should make the most of it to save money on student loan interest, which can be funneled into retirement accounts. "With rates so low, many student loan servicers will refinance your loans and your monthly payment could go down, giving you more room in your budget so you can keep saving," Lyons says.

Working from Home with Kids — vgajic/istockphoto

Find Employers Focused on Remote Work and Flexibility

As an employer, Lyons says she's less concerned where her employees work and more about the quality of their work. If you've been affected by the pandemic and need a job, look for an employer who's able to accommodate a new normal that may include remote schooling children and the need for social distancing. It could get you back into the workforce sooner, with retirement savings back on track. "Not all employers require nine-to-five workdays or availability. The best way to find these companies is to ask your friends if they know anyone hiring with a flexible culture," Lyons says.

Smartphone Contactless Payment — Asia-Pacific Images Studio/istockphoto

Delete Credit Card Information From Your Mobile Wallet

This may be a small step, but it's one that can help rein in spending so free cash can be directed toward retirement savings. "When money is tight, it's best to curb impulse spending," Lyons says. "Deleting your credit card from your phone gives you pause before purchase."

social security cards and benefits — zimmytws/istockphoto

Sign Up for a 'My Social Security' Account

The Social Security Administration provides an online portal known as my Social Security where you can create an account and track lifetime earnings, as well as obtain an estimate of expected retirement benefits. Don't wait to find out where you stand. Goldberg suggests checking regularly to have a sense of how much you might reap each month from this benefit.

Retirement Portfolio — Pears2295/istockphoto

Schedule Monthly Retirement Check-Ins

Even if right now you can't afford to contribute to retirement accounts, don't let six months or a year go by without reevaluating the situation. "Check in with your budget every month to see if there's any extra that can go into your IRA, and look at your spending to see if you're ready to start up 401(k) contributions again," says Jen Smith, personal finance expert and creator of ModernFrugality. "Just like you should schedule time every month to make a household budget, you should schedule a time to do a retirement check. You can even do them both at the same time. The important thing is that it's on the calendar and it's a non-negotiable event."

Mom and Daughter Working on Laptop — kate_sept2004/istockphoto

Reduce a Child's Post-Secondary Education Budget

You may have been saving for a child's higher education while employed, but if one thing changes so could the other; that money can be redirected to secure your retirement while there's time to rethink those college plans. "Community colleges offer massive savings on tuition and avoid out-of-town living expenses," says Garth Hassel, author of "Keep Your Life: Plan Your Endgame So Loved Ones Stay Loved Ones." "They also offer vocational training that is highly marketable, so within two years your child could be self-supporting in a rewarding trade. And that's one less mouth to feed at home."

Set Goals and Be Clear About Why

When setting money goals, including those related to retirement, it's important to define your "why," says Anjali Pradhan, a chartered financial analyst, investment coach to women, and creator of the program Investing for Boss Ladies. "You don't want to invest for your retirement just because you know you should. You're committed to doing it because women are twice as likely to retire in poverty and you don't want that stress," Pradhan says. "It's easy to put off saving and investing when your more immediate need is to blow off some stress shopping. But if you remind yourself of your deep, emotional why, you're less likely to engage in unhelpful money habits."