The following is a guest post by Sara Rix, senior strategic policy adviser with the AARP Public Policy Institute.
Hardly a week goes by, it seems, without another headline highlighting the growing number of Americans who, for a variety of reasons, are pushing back their date of retirement. What gets less attention is that women comprise a sharply growing proportion of the older workforce.
At one time, the large majority of older workers were men — 8 out of 10 workers aged 55 and older at the end of World War II. But that started to change as the economy grew and Social Security benefits were enhanced, pension coverage expanded and more employers began offering retiree health benefits.
Retirement at early ages became more affordable, and growing numbers of men made the most of that by leaving the labor force at relatively young ages. Eventually, that decline came to an end, but for decades, older men were a shrinking proportion of the workforce.
While men were getting out of the labor force, women were entering it. Over the past six decades, their labor force participation rate has soared. As a consequence, women — only 20 percent of the aged 55-plus labor force in 1948 — were 39 percent in 1980 and 47 percent last year.
So when we think about the older workforce, who those workers are, what they are doing, and the barriers they may face in finding and keeping a job, we need to keep in mind that nearly one in two of those workers now is a woman.
They are in the labor force for a variety of reasons — the money is important, of course. However, job enjoyment, along with a desire to remain active and make a contribution are important reasons as well.
Kathy Gest, a Washington, D.C. resident in her 60s who is a public affairs director at an international nongovernmental organization, sums this all up.
“I like to work,” Gest says. “I feel like I’m making a contribution, I continually learn things, I meet interesting people, I get to travel to sometimes challenging places, and I like earning a salary.” She also likes to think that her age is a plus — that being older and having a lot of experience helps her “make decisions quickly and find creative ways to deal with challenging situations.”
Feeling much the same way is Judy Ewing, in her early 70s and a part-time and long-time consultant to a First Selectman in Fairfield, County, Conn. She has been active in town government since 1971 and uses her deep local knowledge based on years of experience to advise on key issues. “I don’t feel like I am ‘working’ because my assignments are interesting and very manageable,” Ewing says. “I enjoy it as well because it makes me feel connected to the town and its ongoing important issues.”
But women may also be getting the message that pushing back the date of retirement can help ensure a comfortable old age, especially as employers cut back on pension and retiree health benefits. Many older women are or will become widowed; large numbers have never married or are divorced or separated. These women are typically on their own when it comes to financial support in old age. Women are far more likely than older men to live alone, and, on average, they live longer than men. They typically earn less, are more likely to work part-time, and more often interrupt their work lives for caregiving, even at older ages. They, too, have watched as housing values plummeted and wild market fluctuations increased anxiety about the safety and security of investments.
In light of all this, preparing for a financially secure retirement can seem a daunting undertaking. Continued employment can help a lot. When it comes to Social Security, workers get the biggest benefit by not collecting until age 70. Opting for benefits at the earliest age — 62 — may be tempting, but those benefits are reduced for life. What may look like a reasonable monthly benefit at age 62 might not go so far at 85 or 90, especially if other savings and investments have been exhausted. Benefits rise by about 7-8 percent for each year that receipt is postponed up to age 70, a guaranteed increase that can go a long way toward meeting financial needs later in life.
Not everyone can or wants to wait until 70 to begin collecting Social Security. But waiting even one or two years pays dividends in terms of a higher benefit. Moreover, there is more time to save, to contribute to a 401(k), if available, and to benefit from the employer match if offered. Each year of working also means one less year of retirement to finance.
Of course, not all women can delay retirement. Ill health, caregiving responsibilities and job loss are all factors that may make it impossible to remain at work. Women aged 55 and older were about twice as likely to be unemployed in January as at the start of the recession, and they are far more likely to be out of work for an extended period of time. But for the 14.6 million women aged 55 and older who, according to the latest employment numbers from the Bureau of Labor Statistics, had jobs in January, thinking about keeping those jobs for a few more years than they might have been planning to could be profitable, as well as rewarding in other ways.
David Nathan of AARP Media Relations contributed reporting to this blog.