The Challenges Women Face on the Road to Financial Security

Across the country, women of all ages are falling behind their male peers on the road to a secure retirement.

From the start of the pandemic through December 2021, women accounted for nearly 60 percent of our country’s 3.6 million net job losses.

Approximately 1.1 million women left the workforce entirely.

1.8 million more women were underemployed, or working fewer hours than they’d like.

Meanwhile, as of December 2021, more than a third of unemployed women had been out of work for at least six months.

Taken together, these challenges have serious economic implications for older women today and generations of younger women in years to come.

But women’s long-term financial insecurity isn’t a new problem. The pandemic is simply accelerating a crisis that has been decades in the making.  

To better understand what is happening, let’s look at the obstacles women face at different points in their life:

The first happens as soon as she enters the workforce.  

When a young woman gets her first job, she often earns less than her male counterparts. This gender pay gap persists and compounds over time. Overall, women earn an average of 82 cents for every dollar earned by men, and the gap is even larger for Black and Latina women (62 cents and 54 cents, respectively). Smaller paychecks make it harder to cover day-to-day expenses – meaning less is left over to start saving for the future.  

Fast forward a few years and it’s time to start a family.

In part because child care is so expensive, many women “lean out” – cutting back on their work hours, forgoing promotions or other opportunities, or leaving the workforce entirely. Financially, this decision has ripple effects. Reduced earnings again lead to lower savings. And down the road, it will mean lower Social Security benefits since those are based on lifetime income. If or when she decides to return to full-time in her current job or re-enter the workforce, she is now years behind her male colleagues in terms of position, earnings and savings.  

Because of this, many women are still playing catch up when they become caregivers again – this time for aging parents and other adult loved ones.