As women leave the workforce in record numbers, preparing for financial future takes center stage
We’re hearing it everywhere – people are leaving their jobs in record numbers. Neighbors, family members, friends of friends, or someone you interact with at the doctor’s office or grocery store might be part of what is dubbed “The Great Resignation.”
Reasons for quitting range from needing a break from a stressful job made worse by the pandemic to looking for more pay, flexibility or a complete career change. Self-care has taken off as we realized slowing down was actually beneficial to our health. However, before you walk into your boss’s office and quit, we urge you think about the financial planning aspects to switching jobs.
Burnout, child care responsibilities and remote schooling is taking its toll on women. According to the Wall Street Journal, 4.3 million Americans, or 2.9% of the workforce, quit their jobs in August 2021, the highest such percentage ever reported by the Bureau of Labor Statistics. The scary part for financial planners? Many of them say they had no immediate backup plan.
This is especially true for women who are leaving the workforce or changing jobs at higher rate than men, with CBS News reporting a gender gap with 5.5% of women quitting their jobs in August, compared with 4.4% of men. In the same report the business consultancy McKinsey and Lean In found in their "Women in the Workplace" report one in three women said they have considered either leaving the workforce or downshifting their career in 2021, compared with one in four at the start of the pandemic.
If you are looking to leave or switch jobs, here are financial planning tips to consider:
- What are the benefits? If your employer provides healthcare benefits or others such as an employer-matched 401K, life insurance and disability benefits what are your options if you leave?
- Ask questions – Reach out to your financial planner or, if you don’t have one, consider engaging with one before you quit. Bring up questions about your monthly budget, life insurance, college or estate planning and how this pause in income might affect progress toward your goals.
- Take control - we’ve seen statistics that 44% of American women are the primary breadwinners, so it’s important to make an informed decision about your future. Knowing what your financial options are if you quit or take a different job helps give you perspective and can reduce the stress.
- Advocate – Maybe your current position is able to be changed to better suit your needs. Employees are in the driver’s seat in the war for talent these days, so use this to your advantage and ask for what you want. Negotiating a raise or asking for reduced hours might help, but again, consider the financial implications before making a move.
- Get the documents – Make sure you understand your options when it comes to your 401K and other financial documents. You might be leaving money on the table with company-match contributions, bonuses, flexible spending balances or value of your unused vacation time.
Katy Ufferman leads Maxwell Financial Management’s practice dedicated to helping women with their investments and retirement planning. She’s an advocate for helping women plan for their retirement, because her firm has found although more women are providing for their families when it comes to preparing for retirement, only 10% of women feel very confident in their ability to fully retire with a comfortable lifestyle. TransAmericaCenter.org, 2017