Women seem to shoulder much of the worry when it comes to how COVID-19 is affecting the economy, their finances and their future retirement according to a 2020 study by Nationwide.
The sixth annual study polled 2,500 women and men. Here are some key findings of the study:
1. Women were more concerned in 2020 about a recession and a bear market than they were in 2019.
Findings showed that 82% of women polled were concerned about a U.S. economic recession over the next 12 months versus 60% in 2019. Again, this poll was done in May and June 2020, with the March stock plunge still vivid. Also, 74% of women worried about an ongoing U.S. bear market in the next 12 months versus 57% in 2019.
2. Women said portfolio losses were their top financial concern.
It’s no surprise that one of the two largest financial concerns in 2020 was losses in their portfolio due to COVID-19. However, the same share of respondents, 36%, said protecting their assets was a top concern, versus 26% in 2019. Other primary concerns included health care, saving enough for retirement, and generating reliable income during retirement.
3. Diversification is the main strategy both women and men use to protect assets against market risk.
A majority of those surveyed — 52% of women and 59% of men — stated that diversification was the main strategy they used to protect assets. Fixed indexed annuities were also used as a way of protecting assets.
4. The pandemic hurt the retirement savings of most women.
Taking into account the timing of the study, it’s not surprising that 72% of women said the pandemic had a negative impact on how long they will be able to live off their current retirement savings. Eighteen percent said there was no negative impact, and 10% said they didn’t know.
The impact of COVID-19 has been significant on all areas of life, especially our personal finances. But one silver lining of the financial roller coaster ride many went on in 2020 was that is highlighted the need for us all to have a thorough financial plan in place to to help us all put the changes the economy goes through and our corresponding fears in context. If you don't have a plan in place yet, there's no time like the present to get one started. To learn more about how you can get a plan in place to protect your retirement and family's financial future, schedule a call with our team today!
Mike Bink, AAMS®, CCFS®
Mike works with families to simplify the college funding process and is widely recognized as an expert in college planning. He is passionate about empowering families to become informed consumers of higher education so that they don't pay a penny more for college than they absolutely have to.