Women face unique financial concerns. Each of those unique financial concerns and considerations have been impacted by the COVID-19 pandemic. Whether it is the income gap between male and female workers, the reality of women’s longer lifespans, the challenge of women’s multiple roles and responsibilities or the negative impact of unforeseen life changes, women have specific challenges that should be a part of their short- and long- term financial plans. The unprecedented circumstances resulting from the COVID-19 pandemic and the ongoing recovery make it even more important that women have a solid financial plan in place.
This conversation between three fellow Chamber members, Kim Shumpert, Executive Director of the Chattanooga Women’s Leadership Institute; Bea Lurie, Owner and Founder of Women Repair Zone where women instructors teach women home repair, home improvement and auto maintenance skills; and Cody Sims, Ameriprise Financial Advisor and Franchise Owner, provides an opportunity for local employers and employees alike to learn what women should do during this time of market volatility and recovery to address those concerns.
Shumpert: What are ways that women can make the most of workplace benefits or unemployment support during this challenging time?
If you are the employee, be sure to:
- Assess any health, life and disability income insurance.
- Understand your employer-sponsored retirement plans, like 401(k)s and employer matching, and utilize the advantages and investment options in these plans.
- Invest wisely – Determine your risk tolerance. Get invested and stay invested. Diversify.
- If you are an employee who is currently furloughed or unemployed due to the COVID-19 pandemic, be sure to work closely with your company’s human resources professionals regarding unemployment compensation. Learn about the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was recently passed by Congress and signed into law.
If you are an employer, be sure to:
- Provide your employees with information about how the CARES Act may be of assistance to them.
- Provide your employees with timely and accurate information about the timeframe of their furlough or unemployment.
- Work with the State Department of Labor to promptly complete the necessary forms for your employees to receive unemployment compensation for which they may be entitled
Shumpert to Lurie: Bea, as a woman heading a local business and interacting with other female business leaders and employees, what recommendations do you have about ways women may address the income gap during these immediately challenging times and long-term?
Lurie: Women entrepreneurs need to have a solid business plan, clear goals and specific objectives. All of these must have specific and realistic measurements with a timeline to ensure financial success. Entrepreneurs should review these documents weekly to track progress and make adjustments as needed. One important lesson from COVID-19 is that businesses must have multiple income streams and be ready to shift when the inevitable crisis happens. The Chamber has adjusted in many helpful ways including online networking and a list of resources to help business owners during this most difficult time.
Addressing the Reality of Women’s Longer Lifespans
Shumpert: Cody, we know that women live on average 4.8 years longer than men, but that difference in life expectancy can be considerably longer. The COVID pandemic has prompted many women and men to re-examine their financial planning goals and employment and retirement expectations. What are some of the factors women should consider in those areas?
Sims: Women should save more, consider working past typical retirement age, consider a balanced portfolio mix and make sure they are protected with life insurance, disability income and long-term care insurance.
Working longer means more years of compound interest earned on your investments.
Female business owners should be particularly mindful of both their short-term financial realities during economic recovery from the pandemic while not losing sight of their long-term financial goals.
Historic market volatility has been a reality across the globe in recent weeks. The spread of COVID-19 has precipitated a record drop in the stock market and a sharp plunge in bond yields, sending the U.S. into its first bear market in over a decade. There's no doubt that this pandemic is different and has caused a larger dislocation than past virus outbreaks. However, it’s encouraging to recall that financial markets have historically rallied following major health crises. Markets have generally delivered positive returns in the six to 12 months following the peak of a virus outbreak. This is a very serious and difficult situation. Eventually though, markets should return to some level of normalcy, and the economy will come back to life. Historically even the worst markets have been temporary dips in a general march higher for stocks.
Shumpert to Lurie: Bea, what have you done during this recent time frame of the pandemic to keep apprised as to the realities of both your business and personal financial assets? And how has the present situation prompted you to look anew at your long-term financial goals?
Lurie: At Women Repair Zone, I have cut expenses, received a PPP loan and applied for business grants. I also applied for unemployment. We just launched a GoFundMe campaign, benefited from the I Love Chattanooga Auction and are a participant with #hereforgoodtn which splits the price of t-shirts saying Here for Good TN with business owners. Women Repair Zone is also making changes and will be offering – starting in six weeks – live and taped workshops that will use a unique approach to maintain the Women Repair Zone experience. We are very excited about this opportunity to serve our customers and to expand our customer base. Once it is safe to provide in-person workshops, we will have two sources of income which will help reach our financial goals more quickly. Thankfully, our personal finances have been unharmed by COVID-19. In fact, because our expenses are significantly down, we are able to use some of that savings to work on projects that were not in the budget. We also donated some of our savings to families and organizations in need. That was our immediate priority.
Addressing the Reality that Women Fulfill Multiple Roles and Responsibilities
Shumpert: Women have familial, workplace and community roles that are often different from those of men. Parenting is a big responsibility on all fronts – including your finances, and 75% of all family caregivers are female. Women are often caring for aging parents as well as children while employed full-time or leading their own businesses. Cody, how would you encourage women to effectively address the challenges of their multiple roles and responsibilities when it comes to their finances and those of their employees?
Sims: Recovery from the COVID pandemic is providing helpful lessons for us all, including women as they function in their multiple roles. They should be sure to talk with their family about financial goals and ensure that they are protected if something unexpected happens. Be certain that they have access to all the information needed to make good financial decisions. Plan for both the immediate and the future knowing that it is the best way to help their families if they are an employee, and their family and business if they are a business owner.
Changes that often impact women’s finances – divorce, widowhood, unexpected health events – are possible life events that women and men may face. However, as caregivers, parents and business owners, women should be particularly informed and do the following:
- Know the realities of Social Security Benefits and rights as a beneficiary of a spouse’s qualified retirement plan following a divorce or widowhood.
- Make sure that their affairs are in order by updating beneficiary designations, power of attorney, last will and testament and health care directive.
Planning for the future – both the predictable and the unpredictable – is a real gift women can give to those they love including their families and organizations. Women often give more to charity than men and are more likely to volunteer. They should be sure to plan for their immediate and long-term charitable giving of their time and resources.
Shumpert to Lurie: Bea, has the COVID pandemic and recovery prompted you to examine your multiple roles as a woman business leader and those of the women with whom you and your business engage? How can you effectively address the financial challenges of those roles?
Lurie: Women Repair Zone empowers women to save money and be more confident and independent. That’s one of the reasons I started this business. I discovered feminism when I was 12 years old and since then have never accepted limitations that society tried to place on me because I was a female. I encourage all women business owners to ignore the doubters, the sexists and mansplainers. Listen to your dream and follow it! There are plenty of women business owners who will offer guidance as you need it. Don’t forget that your voice matters so always speak confidently. You are the expert on your business.
Shumpert: Cody, do you have any additional thoughts on how women may more effectively meet the challenges of the present financial realities and be proactive in recovery from the financial impact of the COVID pandemic?
Sims: Revisit your views on risk: There’s nothing like a significant market downturn to remind you that investing involves risk. Market swings provide an opportunity to re-assess the level of risk in your portfolio and determine whether you still think the amount is appropriate for your circumstances. The level of comfort (or discomfort) you feel when the market moves up or down substantially is a good starting point on whether your portfolio fits your risk profile.
Utilize investment products that provide protection and guarantees: A certain percentage of one’s portfolio should be anchored with investments that provide all the upside potential of the financial markets, guaranteed annual growth to the base amount and guaranteed income streams that are available to replace a portion of one’s salary/wages during retirement. Retirement planning specialists have learned to structure these “private pension” strategies to provide our clients with the confidence and security necessary to weather financial storms and hold-the-line during market corrections.
Remember the power of diversification: Instead of simply selling your stocks in an attempt to cut your losses, review your portfolio to see if it is properly balanced between stocks, bonds and cash that align with your goals, time horizon and your ability to manage risk. While a diversified portfolio can’t guarantee profits or protect against all losses, it can greatly reduce the impact of volatility.
Stay focused on your long-term goals: Remember, your investment strategy is based on your goals, not headlines. While it’s important to be aware of the news related to COVID-19, particularly from a health perspective, be careful not to let your emotions affect your investing. Try to keep your portfolio on a steady course. Volatile periods in the market can create good opportunities to either invest more or to adjust your portfolio as needed. But make sure any investment decisions you make are in the long-term interests of achieving your financial objectives.
Meet with a financial professional: If you are concerned about the recent performance of the markets, it may be an ideal time to sit down with your financial advisor. Together you can talk about your financial goals for the future and what steps you can take next to start on the path to achieving them.
Knowledge is power: Become empowered through knowledge about your unique financial challenges as a woman. Learn how you can effectively address those challenges in order to achieve your financial goals.
Get in Touch
Kim Shumpert | Chattanooga Women’s Leadership Institute (CWLI)
The mission of CWLI is increasing the leadership capabilities and influence of women.
Email: [email protected]
Bea Lurie | Women Repair Zone
Women instructors teaching women home repair, home improvement, and auto maintenance skills in a no judgment environment.
Cody Sims | Ameriprise Financial Services, Inc.
Cody Sims, Chartered Retirement Planning Counselor (CRPC), Accredited Asset Management Specialist (AAMS), Accredited Wealth Management Advisor (AWMA)
Cody is a Financial Advisor and Franchise Owner. He specializes in fee-based financial planning and asset management strategies and has been in practice for 25 years. His client satisfaction ratings are the highest of any Ameriprise franchise in the region.
Ameriprise Financial Services, Inc.
Brabson Place – 412 Georgia Ave., Suite 210
Chattanooga, TN 37403
Email: [email protected]
Website: Ameripriseadvisors.com/James E. Sims