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'Women need more for retirement because they live longer, and yet they earn less': Retirement expert

Women's Institute for a Secure Retirement President, Cindy Hounsell, joined Yahoo FInance Live to break down why women need to save more for retirement.

Video Transcript

SEANA SMITH: It's time for our retirement segment brought to you by Fidelity Investments. And we want to bring in Cindy Hounsell. She is the president of the Women's Institute for a Secure Retirement. Cindy, the women have been hit very hard when it comes to the pandemic. About three million have dropped out of the workforce. It's a story that we follow very closely here on Yahoo Finance. But my question to you is how big of a toll has this-- has the virus, has this pandemic had on women's retirement savings?

CINDY HOUNSELL: Well, I don't think we'll know that for a little while. But when you stay out of your job and you're not earning and you're not contributing to a retirement account, you know, you're really behind in the eight ball. And women already are having a hard time. All the statistics show that, you know, women are behind in every area.

And they don't have paid leave. They don't have-- a lot of part-timers don't have benefits at all. We have gig workers who are out of the workforce, more single women than ever before. So it's pretty difficult, you know, for people to be thinking about how to improve their retirement these days when they're sort of trying to keep their household together.

EMILY MCCORMICK: And Cindy, this is Emily. What tips would you have for someone who became unemployed during the pandemic and maybe either had to dip into their retirement fund or hold off on making contributions? What's the best way for them to get back on track and make up that lost ground?

CINDY HOUNSELL: Well, I think like not furthering your debt accumulation during this period is sort of the best thing you can do for yourself. And then learning as much as you can so that when you're able to get back to work and get back on track, you know, you'll be able to get back to normal and what we hope will be normal and will be better for women as they go forward.

I've been working on this issue for a long time. And I always keep thinking to be positive like it's going to get better for women. And it doesn't. There's always some new whammy coming along that, you know, because women earn less and they end up staying out of the workforce to take care of children, to do elder care, you know, all the things that actually don't help improve your retirement, so.

SEANA SMITH: Cindy, you mentioned you've been following this for a long time. And it doesn't seem like the situation significantly improved. So when we talk about addressing the larger issue here, then what needs to be done on a government-- on a federal level?

CINDY HOUNSELL: I think, you know, the paid family leave will be enormous. And I think that will happen in some way. You know, maybe it won't happen the way we all want, you know, in the beginning. But I think that will improve because more and more women are moving up in jobs. And everybody realizes, you know, that this is something that has to change because the dirty secret is that women need more for retirement because they live longer. And yet, you know, they earn less. And they do all of these things for their families and parents and in-laws and everyone else that needs help. And, you know, that doesn't help improve their own personal retirement portfolio.

So, and then, you know, the other things that's making access to a savings, emergency savings. And I think that's the brightest light that's coming out of this whole situation, the pandemic, is that everyone realizes that if there were emergency funds that people could automatically contribute to at the workplace, that that would help sort of everyone and that, you know, employers could possibly get, like, a change in regulations and make it easier for them to contribute to an emergency fund in the same way that they contribute to a 401(k) or, you know, some easier way of helping people get back on track.

And so I think that will make a huge difference. And then, you know, just having more access to retirement plans and I think there are a lot of good policies out there that came a year or two ago in the Secure Act. And those are being enacted sort of soon, as soon as we have regulations around all of these issues. And that, too, will make a difference. But, you know, it's hard for people. Like, the question we get all the time is, like, how do I even start an IRA? And I know that seems easy to the people that watch your program. But for people that are out there, you know, in the rest of the world, it isn't so easy. People are looking for the building that says, open up an IRA, so.

EMILY MCCORMICK: Right, and what are the strategies that you'd offer someone who's trying to balance these different priorities, like being a caregiver, trying to provide for their children or their elderly parents, alongside planning for their own retirement?

CINDY HOUNSELL: Right, well, that's pretty steep ride, you know, to get to the top of that mountain. But, you know, what we try to tell people is look, you can only do as much as you can do. Learn everything you can. Women are sort of famous for being asked the question, you know, like, about financial literacy, which is April is Financial Literacy Month. And what ends up happening is that, you know, they don't-- they often aren't sure, so they'll say they don't know. And the men will-- you know, if they're unsure, they say, of course, they know.

And so the women always look bad when the studies come out that they don't know enough. So I would say, like, learn some of those things that you'll feel confident about, you know, saying you know something, you know? You know what an IRA is. You know, what type of IRA you have, or you know what your retirement age is for Social Security, for other government programs, so that you're even able to help other people in your family, like your parents as you take care of them as they age. Especially your audience, I think, is, like, stuck in that that sandwich generation of just having to do way too much.

So I think staying out of debt, learning what you can. You know, just don't beat yourself up. There's nothing you can do about it right now, other than to stay steady and, you know, not try to-- there are calculators that show that, you know, when you take money out of a retirement plan, what it means for your future. So I think start looking at the calculators that show you how much money you're going to need for retirement and try not to use your retirement money, if you can take a loan or do other things that are available to you. So, really knowing and looking and knowing that you have to find ways to make it work is the key thing.

SEANA SMITH: Cindy Hounsell, it's great to have you on, president of the Women's Institute for a Secure Retirement. I think a lot of our audience found your insights and your advice very valuable.