NextAvenue.org has permission to reproduce this article.
This was what caught my attention: Over twice as many middle-income U.S. Boomer women than men claimed they were able to save more money for retirement during COVID-19.
This is the new survey data from CNO Financial Group which sells life and health insurance as well as retirement products. The survey gathered insights from more than 2,500 boomers aged 57 to 75 with an annual household income between $30,000 and $100,000 and less that $1 million in investible assets.
The report found that 61% of boomer females saved more in retirement accounts than they expected, compared to 26% for boomer males. 62% of boomer women stated that COVID-19 helped them to realize that they needed more money to retire comfortably, as opposed to 34% for men.
A middle-aged woman, I believe COVID has pushed my retirement age back by at least three to five more years because of my fear of uncertain outcomes. Lisa Parsiola is the owner of The Brighton Group, an interior design company in Berwick, La. I worry about unexpected future health care costs and the uncertainty in global economics.
Make sure you read How to Claim Social Security At the Right Time
What boomer women think about money
Parsiola has the good fortune to have been able to continue contributing to her retirement accounts and increasing her cash reserves during COVID-19.
Parsiola stated that the old saying "I would rather be safe than sorry!" was true at this time. Because I didn't travel, dry clean, or go out, it was much easier to save during COVID. However, her income fell 32% in 2020 due to some potential customers cutting luxury spending like her design services.
A new study, 2021 Women, Money and Power, reveals that boomer women feel secure financially. 76% of respondents said they felt financially secure, according to Aimee Johnson, Allianz vice president for Advanced Markets.
51% of women Allianz surveyed said they pay more attention to their savings and spending because of the pandemic.
This might interest you: Retirement is one of our most difficult decisions. This will make it simpler
I spoke to experts to learn more about retirement saving behavior in recent years, the reasons behind it, and whether or not it will continue.
Scott Goldberg, President of CNO Consumer Division, spoke first about the survey results.
He said that while most people have a steady income and retirement goals, some respondents were able exceed these goals. This could indicate that the expected amount they had was lower because of other financial obligations or that they wanted to save more but were unable to.
Some are facing rising caregiving costs
This makes sense to me. Expected is the key word.
The shock of COVID-19, fears of job loss or increased caregiving costs and responsibilities and the shock of COVID-19 I believe helped the boomer women to save more than they expected. Over the years, I have found that women of all ages are more pessimistic about finances than men.
My personal caregiving expenses increased when my mom, a 91-year old, moved in with Cliff and I for much of 2020. To be honest, I was concerned that I would have to reduce my retirement savings. Fortunately, I didnt.
Unexpectedly, I was surprised by one finding in the Allianz survey: The percentage of boomer women who claim they are responsible for long-term financial decisions such as financial planning and investment decisions has dropped from 37% to 31% in 2019.
Johnson was also bothered by this news.
Johnson stated that the increasing number of women approaching retirement is worrying. As they approach this important aspect of their lives, I encourage women to be proactive. It is crucial to be informed, engaged and responsible for their finances during this time.
See also: Where should you retire? MarketWatch's new tool alerts you to climate risks and helps you to find your dream spot
Catherine Collinson, president and CEO of Transamerica Institute and Transamerica Center for Retirement Studies, and Next Avenue Influencer, Aging, told me that her firm's most recent survey, which has not yet been published, found that boomer females are less confident about their ability to retire comfortably than men.
Collinson stated that women 50+ were more likely to report having reduced their daily expenses during the pandemic than men.
She said that early signs suggest that the pandemic is causing both men and women in general to examine their financial situations and to take control of their finances.
The pandemic has shaken the world
Maddy Dychtwald is the author and cofounder of Age Wave, a think tank and consulting company. A June 2021 survey by her firm and Edward Jones revealed that 75% preretirees women surveyed felt that the pandemic had made them more concerned about their long-term financial future. Only 65% of preretiree males felt this way.
Dychtwald stated that I believe boomer men were more in control of their retirement savings before the pandemic. Boomer women, however, were more likely to have been shaken by it, which led them to concentrate more on their retirement savings.
She also said that preretirees may feel more pressure to prepare for retirement and save now, as their retirement savings confidence has fallen to an all-time low.
Michelle Connell, the owner of Portia Capital Management in Dallas-Fort Worth, gave three pieces of advice to boomer women about saving for retirement. She advised them to put more money in when they can and not hold too much cash. Also, invest in stocks and mutual funds that invest in equities. This allows you to take on more risk but has higher returns over time.
Connell insists that boomer women must change their safety-first approach to investing.
She said that women are very good at understanding downside risk. We don't want to lose money, so we don't. Women need to be willing to take on more risk to fund a longer life expectancy and rising inflation.
Connell's attitude is supported by data from LT Trust. According to the study, 78% of boomer males increased their stock portfolios for retirement during the pandemic. Only 51% did so for women.
Connell suggested a way to increase investment risk. He is the famous manager of the Fidelity Magellan Fund from 1977 to 1990, and the author of the best-selling books One Up on Wall Street & Beating the Street.
Don't miss this record-breaking figure: The average 401(k), balance is now at record levels
Lynch's motto is to invest in what you already know. Lynch's best stock purchases were made by wandering around stores and asking his friends and family about the products and services they used.
Connell also recommends the same advice. She advised that you stick with investing in what you are familiar with, and what you like. Pick a few stocks, or a group of stocks from an exchange-traded fund. Don't look at it every single day.
Kerry Hannon is the author Great Pajama Jobs. Your Complete Guide To Working From Home. Her books include more than a dozen. Her website is www.kerryhannon.com. Follow her Twitter @kerryhannon
This article was reprinted with permission from NextAvenue.org, Inc. 2021 Twin Cities Public Television, Inc.
Next Avenue has more:
