When your father or grandfather retired, his company might’ve thrown a little get-together, complete with toasts by backslapping colleagues, a cake, and an engraved watch. If he was lucky, he walked into retirement knowing he had a company pension or ample retirement savings to see him through the rest of his life.
Today? Not so much. Especially not for women.
Women who are approaching retirement in the U.S. today face a trifecta of challenges: They’re living longer (an average of 20 years past age 65), have significantly less money saved (an average of just $34,000), and face ever-increasing costs, especially for health care (an average of $5,503 a year out-of-pocket). This adds up to far greater economic insecurity among women as they age. In fact, according to the National Institute on Retirement Security, women aged 65 and older have incomes that are 25% lower than men’s, and they are 80% more likely than men to be impoverished past age 65.
Women of color face even deeper disparities as they age. African American and Latinas earn less from Social Security, assets, and pensions than do white women, and they rely on Social Security for a larger portion of their income, according to the U.S. Department of Labor.
The good news is that employers have a unique opportunity to turn these numbers around by thinking proactively about supporting working women today so they can age well later. Here are three ideas.
Close the pay gap and expand mentoring
Women begin retirement with a hurdle that’s followed them their entire careers: the gender pay gap. Labor Department statistics show the gap is as stubborn as ever, with women earning 21% less than men, a disparity that worsens among women of color and in certain industries more than others. Lower pay means less money saved, both in personal retirement accounts and Social Security benefits. Overall, women receive nearly $4,000 a year less in Social Security than men.
Employers can level the playing field by eliminating the gender wage gap among their employees now, so their women employees don’t leave the workforce already disadvantaged once they retire. This is not an impossible goal. Starbucks, for example, has reached 100% pay equity among its employees. One part of the solution is to widen women’s participation in STEM fields; another is for employers to offer more flexible schedules and remote-work opportunities.
Companies also need to do a better job of nurturing and mentoring women to move up into leadership positions that offer greater opportunities and more pay. Staff development and performance management are critical to ensuring that women keep learning and developing over the entire course of their careers–this way they can retire from them on a more secure financial footing.
Let women phase into life after work
Few women today want to work one day and stop the next. They want and need to continue working, but other responsibilities may be tugging at them. By one recent estimate, for example, up to 20% of working women are also caring for an elderly loved one.
Employers need to create organizational climates where women approaching retirement don’t feel it’s risky to have conversations about phased retirement options. Working part-time or moving to a position that requires less responsibility can be a solution–and employers should be game to offer that. In the latest Transamerica Retirement Survey, only 23% of workers said they plan to immediately stop working at a specific point in time. However, 25% also said that their employers do nothing to help employees enter retirement. Organizations need to step up and change that.
Arm women with knowledge of what’s ahead
As a society, we try to prepare girls to grow into successful women; think Girl Scouts, STEM initiatives, and Girls on the Run. But how do we help women prepare to age well? We don’t teach them how their bodies are going to change as they age, or how to manage their savings so it will last an extra 20 years.
Just as we counsel younger women to make informed decisions about their education and careers, we need to support older women in planning for a successful third phase of life. My organization, the National Council on Aging, created an “Aging Mastery Program” to provide this kind of unbiased guidance, complete with small steps people can take to chart their own paths toward aging well.
While the days of engraved watches and pension plans may be over for most (and were never equitably available to all to begin with), a secure retirement should be a right for every person who has put in a lifetime of work–especially women. Forward-thinking employers need to help women plan not just for successful careers but for successful lives after work. And they need to start right now.
Anna Maria Chávez is executive vice president and chief growth officer at the National Council on Aging.