Why More Women May Be Working Beyond Age 65

A new trend is emerging in the labor market.  Women make up nearly half of the nation’s workforce and more of them are choosing to delay retirement and work through their 60s. The labor force participation rate for women 65 years and older has climbed to an all-time high, rising to 15.3 percent.  For some, the decision is by choice but for others, it is out of necessity.

Living Longer

Women are living longer than men and that is playing a role when it comes to more women staying in the workforce.   A woman reaching age 65 today can expect to live, on average, to more than 86 years of age according to the Social Security Administration.  One out of four 65-year olds can expect to live beyond 90.  The retirement years for some women can be almost as long as their entire working life, says Annamaria Lusardi, Professor at The George Washington University School of Business.  “It’s very hard to support such a long retirement especially for women.  They do live longer than men and so there is an additional need to continue working,” she says.

More women are expected to continue working well through their 60s as medical care improves and people adopt healthier lifestyles.  Nearly four million women aged 65 years or older are working.  The number is expected to rise nearly 60 percent to more than 6 million by 2024 according to the U.S. Labor Department.

Financial Necessity

More women are working at an older age because they have to financially.  Women are more likely than men to face financial hardship later in life.  Many women put off saving for retirement to pay for expenses including medical costs and college tuition for their children.  On top of that, many older women are single, widowed or divorced, leaving them to rely on just one source of income.  Women also earn less than men and typically receive less in Social Security due to lower lifetime earnings.

Rising debt, Lusardi says, is also playing a role when it comes to women delaying retirement.  She says easy access to credit for loans, mortgages and credit cards has increased the amount of debt many women have.  “What we see is that women carry debt close to retirement a lot more now than in the past,” Lusardi says.  “Women may be pushed to work longer because they have to service the debt.”

Give Yourself the Choice

The goal is to have a choice about whether or not to continue working later in life, not being forced into it.  Lusardi says women need to understand their financial situation, no matter how frightening it may be, and set up a plan for their financial future.  “If people don’t think about the future, they will be unprepared for it.  Because women live so long, I think planning for women is very important and I think this is what will allow them to have a little bit more freedom and more financial security,” she says.

Lusardi also suggests women pay close attention to the amount of debt they have.  While borrowing at historically low interest rates may not be a bad thing, she says rising debt loads could be problematic for some seniors.   “If you arrive close to retirement and are heavily leveraged,” she says, “be careful because your income at retirement has to be enough to sustain you and then pay off the debt.”

Silver Lining

There may be a silver lining to working well into your 60s.  It could actually help you live longer.  An Oregon State University study found that working past age 65 could lead to a longer life.  Researchers found working later in life not only helped people financially but kept them more active and engaged.