More women think they'll be working well into traditional retirement years

Compared with men, most women need to work longer because they have not earned as much — nor been able to sock away enough money for retirement.
Mature woman working in shoe factory
One recent analysis found that the average single female retiree today needs $150,000 to cover the lifelong cost of healthcare, compared to $135,000 for single male retirees.South_agency / Getty Images
By Martha C. White

Even with a solid labor market and unemployment hovering at a record low, a growing number of women anticipate having to put off retirement.

A new survey from the Federal Reserve Bank of New York found that 54 percent of women expect to work past the age of 62, an increase of six percentage points over last year. By contrast, 52 percent of men expect to work past the age of 62, a drop of 5 percentage points from a year ago.

Among women, 38 percent expect to work past the age of 67, a figure that also is a jump of six percentage points on a year-over-year basis, and comes within three percentage points of the survey’s all-time high of 41 percent back in November 2015. The number of men who expect to work past the age of 67 fell from 35 percent to 33 percent over the past year.

Labor market experts say there are a number of reasons why women today feel compelled to work later in life.

“Traditionally, you have two groups of people who work beyond 65 or 67. They’re either the people who are poor and have to, or the people in professional jobs like lawyers, accountants, professors — so it may also be that, as women have gained more jobs in those good professional jobs, there are also now more women in the position of being able to work longer,” said Ariane Hegewisch, program director for employment and earnings at the Institute for Women's Policy Research.

Harry Holzer, professor of public policy at Georgetown University, also said that the increase in women with high-level professional careers could be driving some reluctance to retire. “I think college-educated women and women with professional degrees are much more likely to want to [stay in the workforce],” he said.

But Hegewisch acknowledged that financial obligations could also be putting pressure on women to put off retirement. Generally speaking, “They’re less likely to have retirement funds,” she said.

“They’ve always been in a worse labor market position,” said Jeff Strohl, director of research at the Georgetown University Center on Education and the Workforce.

Compared with men, he said, “They haven’t earned as much or had as many pension contributions along the pathway.”

In contrast to white-collar professionals, blue-collar male workers often labor in physically demanding jobs. Labor market experts speculate that, among blue-collar couples, women may have to join or remain in the workforce to provide a necessary income stream for a family when work like mining, construction or manufacturing becomes too taxing.

“It suggests that the traditional model of men being the primary breadwinner, at least at this point in life, seems to matter less and less,” Holzer said.

However, people reentering the workforce after a certain age are at a statistical disadvantage, Strohl said. “Among workers over 50, the majority of job changes lead to lower earnings,” he said.

Women also are statistically likely to live longer than men, which means their nest eggs need to cover more years. A Fidelity Investments analysis conducted earlier this year found that the average single female retiree today needs $150,000 to cover the lifelong cost of healthcare, compared to $135,000 for single male retirees.

“It may well be that this is a reflection in the lack of confidence in their retirement savings. We still have a sizable part of the population living paycheck to paycheck,” said Mark Hamrick, senior economic analyst at Bankrate.com. “There’s still a glass ceiling with respect to earnings. That’s very important with respect to how much one is able to save for the long term,” he said.

The lifelong lower earnings of many female workers has a double impact, since a smaller paycheck lowers the amount of money a woman can sock away and invest, while lower pay reduces the amount of Social Security she can expect to augment her own savings in retirement. Another hurdle is that women are more likely to have sporadic employment. “They’re the ones who step out of the workforce to care for a child or an elderly relative,” Hamrick said.

When combined with lower earnings, it isn’t surprising that many women may feel as if they have no other choice but to keep working, he said. “To the extent that women aren't earning as much as men, broadly, that has an effect on their retirement savings.”