Women always financially lag men. COVID made it worse. Here’s how they can recover some ground

April is financial literacy month and it’s ironic that it comes on the heels of Women’s History Month because women historically have lagged men financially.

The pandemic made it even worse.

At the onset of the pandemic, the labor participation rate for women tumbled to 54.6% in April 2020 from 57.9% in February 2020 as hospitality jobs got cut and schools and daycares closed, leaving women to take the brunt of childcare duties. The labor participation rate is the proportion of the working-age population that’s either working or actively looking for work.

Even with life returning close to normal, women haven’t fully returned to the workforce. In March, women’s labor force participation rate was 57.1%, still below pre-pandemic levels and down 0.1% from February when it hit the highest level since the pandemic began.

With time out of the workforce, women’s savings suffered. A Fidelity survey of 2,622 adults last year showed 79% of women say these events negatively impacted their retirement plan. Of those women, 55% believed it will take a minimum two years to get back on track – if they will at all.

“It’s been a one-two punch for women,” said Christine Benz, Morningstar’s director of personal finance and retirement planning. “They disproportionally occupy the low-paying jobs like in restaurants and they were hit hardest during the pandemic.”

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Even as teens, girls are more likely to feel stress (23%) than boys (16%) when it comes to money, according to a Fidelity online survey of 3,747 adults taken in January. Teen boys (46%) are more likely to feel confident than girls (36%).

As adults, stress is the number one word women (46%) use to describe how they feel about money, while hopeful is the most common word for men (42%), the survey showed.

What is the gender pay gap for women?

And for good reason. Women who work full-time, year-round, are paid an average of 83.7% as much as men, which amounts to a difference of $10,000 per year, and means women must work 15 months to earn the same amount as men in 12 months, the Department of Labor said in March.

“Equal Pay Day – the day of the year when women working in the U.S. finally earn the same amount as men did in the year before – is an unfortunate reminder that historic wage inequity continues,” Acting Secretary of Labor Julie Su said then.

Why do women save less?

Lower wages make saving challenging for women, who outlive men by four years on average and must figure out how to save for retirement with fewer resources.

“Women are more likely to be poor than men in old age and retirement, exclusively reliant on Social Security, have less ownership and smaller retirement accounts,” Benz said.

In 2018, about half of women ages 55 to 66 had no personal retirement savings, compared to 47% of men, the Census Bureau said last year. Further, 22% of women had $100,000 or more in personal retirement savings compared to 30% of men.

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What can women do to catch up or at least close the gap?

“There are some green shoots,” said Joanna Rotenberg, Fidelity’s president of personal investing. “Contribution rates for savings are picking up but there’s still a gap versus men.”

Almost 90% of women have either taken steps to strengthen their finances recently or plan to within the next 6 months, according to Fidelity. About two-thirds adjusted their spending, 60% have saved more or paid down debt, 59% improved their credit scores, and 53% contributed to an emergency fund.

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Rotenberg also noted that women have been opening accounts at Fidelity at a faster rate than men and been having more conversations about financial planning. Because research shows women want to support and be supported by other women when it comes to their finances, Fidelity has seen a jump to about 300,000 members in its free online “Women Talk Money” program since its launch in 2020.

“Women value relationships,” Rotenberg said. “A lot of women in the millennial and Gen Z cohort come to discuss in the community and help one another. We also provide facilitated panels” to answer questions and talk about investing.

How women can build wealth

• Target date funds: Because women tend to invest more conservatively on their own, Benz recommends target date funds that automatically invest your money aggressively when you’re young and become more conservative as you age.

• Save early: Women’s incomes tend to peak earlier than men (late 30s versus 50s for men) so they should take advantage of those “pre-children” years to turbocharge their savings, Benz said.

• Roth IRAs: If you’re young, a Roth IRA may make sense because you can withdraw your contributions tax free if you need to later, if you plan to take time off or cut your hours to care for children. Benz says you could even split money into a Roth IRA to grow for retirement and some into an emergency fund. Both could be used to cover expenses.

• Long-term care insurance: Since women tend to live longer than men, are generally younger than their partners, they have more medical care expenses and might consider one of these policies.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.

This article originally appeared on USA TODAY: After the she-cession: Women try to regain pandemic’s financial losses