By Joyce DeMonnin, AARP Oregon Outreach Director
Women have made substantial gains in the labor market. Nearly 60% of women are in the workforce today yet we still lag behind in retirement security. There are a variety reasons for this from leaving the workfoce to have children or doing family caregiving to earning less. Women also live on average five years longer than men.
So what can we do to bridge the retirement security gap? AARP has excellent financial tools and resources for our members and the public. One of the tools I really like is our online retirement planning calculator.
This is a simple online tool that helps folks examine their current resources, expected income from Social Security and other resources as well as a retirement date. The calculator lets you know if you’re on track or how the picture would change if you worked a little longer.
At AARP Oregon, we've also been educating the public about their Social Security and Medicare benefits. The calendar on our state web page has the times and locations of our upcoming workshops. It’s been surprising to most of us how little people actually know about these programs. For example, when we do workshops around the states, only a handful of people at each presentation know that there are costs associated with Medicare.
So what are some strategies to help women with the retirement savings gap?
- Allow non-paid, family caregivers and stay-at-home moms to contribute to an IRA or other retirement savings.
- Establish automatic enrollment of 401K plans so that more workers will be covered.
- Educate women about the financial advantages of waiting until full retirement age to take Social Security. Here is a quick example: A person who takes retirement age @ age 62 and receives $750 a month in benefits could earn $1,000 a month at full retirement. If you wait until age 70, the payment would be $1,320. So if you take the benefit at 62 instead of 70, you’re getting just 56% of the full benefit amount AARP also has a social security benefits calculator on our website http://www.aarp.org/work/social-security/social-security-benefits-calculator/
And now in Oregon, with the passage of Retirement Security legislation, soon all Oregon workers will have the option of saving for retirement at work.
Finally, we all need to rethink retirement age and what that means. For a lot of women, staying in the workforce a year or two longer could significantly increase their retirement security. And yet we all know that the job market is tough for older workers. More needs to be done to help on this front, as well.