What does it really mean when women retire from work? How to protect our financial future.
Since the start of COVID, we have been analyzing the impact of the pandemic on women’s careers. With 1.1 million women still out of work since 2019, it’s clear the impact will be long-lasting. But how much, exactly, does withdrawing from the labor market cost the average woman? A tool of Center for American Progress provides insight into the cost of the pandemic on future income and retirement. To figure out what “taking time off” would really cost me, I tested the tool — and was shocked by the results. I would potentially lose $450,000 in lost wages, $363,000 in salary growth, and $291,000 in retirement assets and benefits.
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While both men and women face stressors and professional and personal losses, the reality is that women (especially mothers) carry the vast majority of the mental load and the burden of household chores. when it comes to bi-sex family units, according to Whitney Casares, MD, MPH, FAAP, founder of Modern mom docand author of “The Working Mom Blueprint”.
“When things get hectic, women are more likely to step back from their work obligations to take care of their children’s needs,” she says. “As women miss opportunities to be present at work during the pandemic, they are also missing opportunities to influence decisions, to be included in discussions that affect them, to prove their professional value and, ultimately account, to advance their careers.”
So what can women do to protect our financial future and boost our career progress? We spoke with experts about the considerations women should make before leaving work. And remember: privilege plays a vital role in this. Many women, especially those of color, have no choice in the matter. If you do, consider yourself one of the lucky ones.
Have a frank discussion with your partner and/or your village of parents
Before retiring from work, Casares says women should consider whether they have other alternatives. At first it may seem impossible, but if you don’t discuss and do research, you won’t know for sure. Casares says women should ask themselves (and their support system) these questions:
- Could they reduce a percentage of work for a short period of time, asking their partner to do the same at their work?
- Are there other parents who could trade daycare with them?
- Could they be creative with their work schedules – work one day off hours while their partner works regular hours, then vice versa?
Do the math
Samantha Ettus, CEO of Parking space payments, says he’s seen many couples make the wrong calculations when looking at the cost of childcare and comparing it to the income of the spouse who earns the least for a year. It’s the wrong approach, says Ettus, because our careers are long while the baby years are short. “Once a woman leaves, it is very difficult to come back. So the math has to be five years of childcare versus the number of years of potential work for the lowest-paid,” she explains.
Discuss your situation with your employer
When LinkedIn News polled its users on the benefits active women reported helping them work out, “flexibility” scored the highest. However, Caroline Fairchild, editor of the Professional Network, says this is now becoming more of an expectation than a benefit. That’s why she recommends discussing your new needs with your employer, rather than leaving the workforce altogether. “It may be possible to arrange a more flexible work policy with your employer that better suits your schedule and needs,” she continues.
Or, if you need, say, a month off, try to assess how open your manager might be to a short leave, Fairchild recommends. “Managers are getting a better understanding of the demands female workers are facing right now, and it could be in both parties’ best interests for you to take some time off and then come back and resume your role,” she adds.
If you drift away, stay active
Every time you walk away from work, try to leave a little toe in the door. As Ettus recommends, that means keeping your contacts warm, planting a seed for your comeback, and finding a side hustle, if you have the time. If you leave your job completely for a few years, in the months leading up to your anticipated return, “start talking about it with your friends and former colleagues so that you can enter the job market when the time comes and take on freelance projects,” she share.
And if all you’re able to do during this season of your life is keep your head above water, that’s fine. But if you have the energy, time away from work could give you space to invest in your skills. According to Jeanniey Walden, Director of Innovation and Marketing at Daily Pay. “When you’re ready to get back into the workforce, you might be ready to tackle a potentially more lucrative new career,” she says.
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