If you’re a woman, retirement may be even further away than you thought.
The fastest-growing demographic of workers in the U.S. right now isn’t recent college graduates but women over 65. By 2024, twice as many women over 65 will be working, compared with 30 years prior, according to projections from the Labor Department. For most, working longer isn't a choice; it's a necessity.
This drawn-out working life is not for lack of saving for retirement. Female employees are 14 percent more likely to participate in their employer’s retirement plan than their male colleagues, according to a recent report from Vanguard. Target date funds have leveled the investing landscape, making the composition of retirement portfolios increasingly similar for men and women.
Yet men end up with average account balances that are 50 percent greater than their female counterparts'. The wage gap is a major factor in this difference, but closing it alone won’t fix the problem of needing to work longer. Even among men, most retirement account balances fall short.
One of the biggest problems is a lack of income planning, particularly in terms of career longevity. The bulk of wage growth happens between 25 and 35, a time when most people aren’t thinking about retirement. After that, earnings level out or decline, based on an analysis of wage data by the Federal Reserve Bank of New York.
As the oldest millennial women turn 35 this year, looking ahead to their career prospects is becoming increasingly important. Here are three steps to take now to plan a sustainable and satisfying career that will set you up for the retirement you deserve.
1. Plot your path. The first decade or two of a career has always been about exploration, according to Pamela Stone, author of “Opting Out?: Why Women Really Quit Careers and Head Home” and a professor of sociology at Hunter College and the Graduate Center of the City University of New York. But eventually you have to commit to a path, she says.
Millennials can expect to work for a minimum of 45 years before reaching the full retirement age of 67 as it is currently defined by the Social Security Administration. No career path is perfect, but it’s advisable to have a vision for what you hope to achieve than to make decisions as you go.
“It is vital to have a career action plan,” said Cachet Prestcott, a certified career coach based in Georgia. “Look at where you are, think about where you want to be and how you intend to get there. You can break it down by decade and then break down those decades even further.”
For help with mapping out your career goals, don't be afraid to seek out advice from those you admire — women and men alike. “For women, it’s really important that it’s not just another woman, because men still have a lot of the power. There are so few women at the levels that you need," said Judy Robinett, author of "How to Be a Power Connector.”
2. Build your network. Setting goals is a first step, but surrounding yourself with people who can help you achieve them is equally important.
“Build a network of people who have your back and have your future,” Robinett said. Forming relationships with a diverse group of people you can count on if you’re laid off or want to change directions is key to maintaining a fulfilling career over many decades.
“There’s a tendency for people to think about networking strategically,” said Caroline Waxler, founder of Harkness Hall, which programs content for talks, conferences and festivals. But if you’re networking to advance your own goals, rather than to form genuine connections, others will see through it. “You don’t want it to be transactional,” she added.
Regularly connecting with new people is essential to expanding your network. "Besides smiling and saying hello, offer a compliment or ask a question," Robinett said. "And of course one of the best things you can do is just listen."
One of the best ways to meet people with shared interests and goals is to join organizations and committees within your industry. Successful networkers focus on quality rather than quantity. Establish and maintain relationships with people who care about you, and who can and will help you if you need it.
3. Stay in it. Inevitably, life will get busy and challenges will arise, particularly if kids are part of the picture. When that happens, persistence is paramount, according to Stone.
More often than not, women are the ones to sacrifice job growth for the family, which can have lasting negative impacts on a professional career. “If a woman wants to forge a career, she needs a partner who is with her in that endeavor,” Stone said.
“Women still need to be pioneers,” she added. “Persistence is better because you have salary growth as opposed to salary stagnation; you have promotion growth and you have pension accumulation. When you interrupt a career all those things are radically truncated.”
Rather than leaving a job to focus on raising children, Stone recommends suggesting a temporary solution that allows for flexibility while you need it but won’t derail your career path. Be proactive in approaching your manager, and outline clear objectives and expectations for the terms of the arrangement.
“Find ways to make your work work. If you've been an effective worker, you’re usually in a better position to arrange some kind of short-term accommodation," Stone said.
Making the most of each phase of your career will ensure that you have as much control as possible over your working years. Forming strong relationships with colleagues and maximizing your earning potential at each decade can soften the blow if you do have to work longer.
And while you’re busy climbing the ladder, try to remember the people around you are doing their best to do the same thing.
“Don’t ever remind anyone who is older than you that they’re older than you,” said Waxler. “God willing, you’re going to get there too.”