{"id":5651,"date":"2016-07-03T07:16:39","date_gmt":"2016-07-03T11:16:39","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=5651"},"modified":"2016-07-04T09:59:24","modified_gmt":"2016-07-04T13:59:24","slug":"women-social-security-and-working-longer","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=5651","title":{"rendered":"Women, Social Security and Working Longer"},"content":{"rendered":"

\"images\"<\/a><\/del>Women are working longer before retiring, or working part-time in retirement<\/a>, and that\u2019s a good thing.<\/p>\n

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Let\u2019s start with the big picture and why I find this trend to be a silver lining for boomer women \u2014 both financially and spiritually. Then I\u2019ll offer some advice on ways women can successfully stay on the job and use these bonus working years to strengthen their finances as they age.<\/p>\n

A recent study, Women Working Longer: Facts and Some Explanations<\/em><\/a>, presented by Harvard University economists Claudia Goldin and Lawrence F. Katz at the National Bureau of Economic Research\u2019s Women Working Longer<\/em> conference last month, reported that women have been working longer for a long time. Their labor market participation increased decade after decade during the 20th<\/sup> century, as more women entered the labor force.<\/p>\n

The New Story About Working Women<\/h3>\n

But that\u2019s an old story, they wrote. \u201cThe new story is that a large fraction of women are working a lot longer, past their sixties and even into their seventies,\u201d said the report.<\/p>\n

(Read my column on Forbes<\/a><\/strong>)<\/p>\n

In fact, the U.S. Bureau of Labor Statistics projects that by the end of this decade, about 20 percent of women over 65 will be in the labor force.<\/p>\n

\u201cWomen\u2019s increased participation beyond their fifties is a change of real consequence,\u201d according to Goldin and Katz. \u201cRather than being an increase in marginal part-time workers, the higher labor force participation of older women consists disproportionately of those working at full-time jobs. Women are remaining on their jobs as they age rather than scaling down or leaving for positions with shorter hours and fewer days.\u201d<\/p>\n

Four factors that have influenced the uptick: More women have been holding jobs with greater advancement, have been college graduates, were not currently married or were married to men who also extended employment into their later years.<\/p>\n

Working for the Money \u2014 or Not<\/h3>\n

Sometimes, the women aren\u2019t working because they need to, financially.<\/p>\n

\u201cFrom my work with Katz, we find a strong increase in employment among the most highly educated of those women older than fifty-five and for those who are in managerial and professional occupations \u2014 even if their financial security appears to be reasonable,\u201d Goldin told me. \u201cHigher levels of employment for women older than fifty-five years also appear to be among those who are healthier and whose occupations are the most rewarding and least physically taxing.\u201d (This echoes the survey conducted by Elizabeth Fideler for her book, Women Still at Work<\/em><\/a>.)<\/p>\n

In other cases, however, money is very much a factor.<\/p>\n

Olivia S. Mitchell, executive director of the Pension Research Council at The Wharton School of The University of Pennsylvania Mitchell and Annamaria Lusardi, a professor of economics and accountancy at The George Washington University School of Business, report in their new study, Older Women\u2019s Labor Market Attachment, Retirement Planning, and Household Debt<\/a><\/em>:<\/p>\n

\u201cWhen we explore the reasons for delayed retirement among older women\u2026household finances also appears to be playing a key role, in that older women today have more debt<\/a> than previously\u2026In large part this can be attributed to having taken on larger residential mortgages due to the run-up in housing prices over time and lower down payments as well.\u201d<\/p>\n

Other gauges of financial distress, they said: few women are able to easily cover their expenses in a typical month or have set aside emergency funds<\/a> to cover expenses for three months. Many women also said they didn\u2019t pay off credit card balances in full, paid only the minimum due and were charged fees for late payments or exceeding the limits.<\/p>\n

Catherine Collinson<\/a>, president of Transamerica Center for Retirement Studies and Transamerica Institute, recently told a U.S. Senate Special Committee on Aging hearing<\/a> that her organization\u2019s surveys found that only 42 percent of women workers say they are building a large enough nest egg to retire without financial worries, compared to 55 percent of men.<\/p>\n

\u201cWomen age 50 and older \u2014 especially unmarried women \u2014 face extreme financial risks and potential poverty in retirement<\/a>,\u201d Collinson told me when I interviewed for a previous Next Avenue article<\/a>. Many women Transamerica surveyed say they plan to work until age 70 or later \u2014 or don\u2019t plan to retire at all.<\/p>\n

The Financial Bonuses for Women Working Longer<\/h3>\n

Fortunately, when I touched based with Mitchell this week, she noted that there were a host of financial bonuses for women extending careers.<\/p>\n

\u201cLonger work reduces the drawdown on financial assets,\u201d she told me. \u201cLonger work could lengthen the time one is covered by employer-based health insurance, hence diminishing personal spending on health care costs. And a longer worklife can contribute to enhanced well being due to continued relationships with co-workers and social networks.\u201d<\/p>\n

And, as they say on late night TV infomercials, there\u2019s more!<\/p>\n

\u201cWork can provide important resources for women \u2014 such as a sense of meaning and purpose, a positive identity, and a social network \u2014 in addition to financial benefit,\u201d said Colorado State Assistant Professor Gwenith Fisher, who has been studying when and why people retire. Fisher was on a Future of Work and Retirement<\/em> panel I recently moderated at Columbia University\u2019s 2016 Age Boom Academy<\/a>.<\/p>\n

\"Gwen
Gwenith Fisher<\/figcaption><\/figure>\n

Moreover, added Fisher, \u201ccontinuing to work is also associated with cognitive and health benefits: research that has studied patterns of cognitive functioning has shown that working in jobs that involve thinking, problem solving, and creativity is related to less cognitive decline<\/a>, and retirement is also linked to earlier mortality, even among people who did not retire due to their health.\u201d<\/p>\n

Of course, men can enjoy these benefits by working longer, too.<\/p>\n

Working Longer and Social Security<\/h3>\n

Working longer can provide women with a significant financial boost from Social Security, too.<\/p>\n

Women are more dependent on Social Security than men and their average Social Security income is roughly 77 percent of that of men, according to research by Aine Ni Leime of Case Western Reserve University. Moreover, said Ni Leime (who recently presented research at the Work and Family Researchers Network <\/a>annual conference in Washington, D.C.), women are 56 percent of all Social Security beneficiaries age 62 and older and 66 percent of all beneficiaries age 85 and older.<\/p>\n

The potential gain in Social Security benefits alone from working longer is enough to place married women on equal footing with married men in terms of Social Security wealth at age 70, according to research by Harvard economist Nicole Maestas, an expert in the study of aging who was also on my Age Boom Academy <\/a>panel.<\/p>\n

\u201cWorking beyond the Social Security early retirement age until age 70 would make a sizable increase in the magnitude of lifetime Social Security benefits to which married women are entitled,\u201d she found. \u201cThe gain in years worked at older ages would be sufficient to offset early gaps in the earnings record, and would place women on par with men in terms of lifetime resources available to them in the latter part of life. This is because the additional years of earnings at these ages replace earlier years of low or zero earnings in the retirement benefit computation formula.\u201d<\/p>\n

5 Tips for Women Who Want to Work Longer<\/h3>\n

So for women who\u2019ve been persuaded that it\u2019s worth staying on the job beyond the traditional retirement age, here are five tips to make sure you don\u2019t burn out<\/a>, do stay employable and can use the bonus years to prepare for a financially secure retirement:<\/p>\n

1. Never stop learning and adding skills.<\/strong> It\u2019s crucial to keep your skills sharp if you want to stay on the job. Sign up for continuing education, or professional development programs offered by your employer.<\/p>\n

2. Keep up on trends in your industry.<\/strong> Then, when attractive opportunities arise at work, you\u2019ll be ready to raise your hand for them. One suggestion: set up a Google Alert <\/a>to alert you about the latest news in your field.<\/p>\n

3. Ramp up your financial literacy.<\/strong> Learn all you can about investing, retirement savings and Social Security strategies. Mitchell and Lusardi found that women who were more financially literate<\/a> were more likely to plan for retirement, were less likely to have excessive debt and were less likely to be financially fragile.<\/p>\n

4. Calculate your retirement savings needs and save at a level to achieve them.<\/strong> Among women who estimated their retirement savings needs, 62 percent say they \u201cguessed,\u201d according to Transamerica. Only 7 percent had completed a worksheet or done a calculation and just 3 percent consulted a financial adviser for the figure.<\/p>\n

5. Continue participating in your employer\u2019s retirement plan.<\/strong> The longer you work, the longer you can keep contributing and stave off dipping into those funds, allowing them to grow tax-deferred. That way your money works longer, too.<\/p>\n

\u00a9 Twin Cities Public Television – 2016. All rights reserved.<\/a><\/p>\n<\/div>\n<\/div>\n

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