Issue: Economy

This op-ed is part of a series about Forgotten Women—financially insecure women between the ages of 50 and 65—and policy solutions that can offer them hope. Learn more about the Hope Agenda from Independent Women’s Voice here. Originally appeared in RealClearHealth.

Social Security isn’t the only consideration when it comes to retirement security. Many Americans approaching retirement are facing very insecure financial futures. This problem disproportionately affects older women, who have less savings and live longer, on average. Not surprisingly, according to new polling from Independent Women’s Voice, 89% of women say they want leaders to focus on financial solutions for those who can’t find new work, but who also can’t afford to retire.

Lawmakers can do more to help and offer hope: States can better protect public pensions, and federal lawmakers can promote private savings through targeted changes to tax policy.

While most sex-based gaps go the other way, women hold just over half of public pension wealth. This is because women dominate careers in state and local government jobs (including the teaching profession). Women have a lot at stake when it comes to keeping these pension funds financially sound.

But sadly, in recent years, lawmakers in some states have not acted as good fiduciaries of pensioners’ funds. In an effort to virtue-signal, many states have allowed their pension funds to be invested in less-than-optimal ESG funds. ESG stands for Environmental, Social, and corporate Governance, and it is a set of metrics that introduce politics into investing.

Many pensioners (and other Americans) likely support the idea of investing in companies that are socially or environmentally responsible. But a good ESG score doesn’t necessarily translate to real-world good.

In fact, some Chinese companies that use forced labor and have horrific environmental records receive a higher ESG rating than responsible U.S. energy companies. And some Russian state-owned energy firms scored higher than privately-owned American and Canadian oil and gas companies. Are Russia and China really where U.S. teachers and other pensioners want their money invested?

Furthermore, ESG funds “certainly perform poorly on financial terms,” according to the Harvard Business Review. States should be—and in many cases are legally required to be—good fiduciaries of pensioners’ money. To invest in less-than-high-performing funds based on political issues is a violation of trust, one that will have real-world consequences for public pensioners, many of whom are women.

Pensions should be invested based on maximum return on investment. Some states have recently reaffirmed their commitment to this basic principle by outlawing ESG-driven investment with state funds. Other states should follow suit.

The federal government, too, can help boost the retirement security of millions of Americans who lag behind in savings due to time taken out of the workforce for family caregiving. Women comprise 66% of family caregivers, and spend 50% more time providing family caregiving than men, on average. When women (or men) take time out of the workforce to care for their relatives, they miss out on important income and savings opportunities.

Currently, federal law allows people 50 years old and older to make catch-up contributions to their retirement accounts. But a bipartisan bill would allow workers under the age of 50 to do this as well. This would better recognize the reality that caregiving—while deeply meaningful and valuable work—comes with a cost to caregivers’ retirement security. Passing this law may not help those nearest retirement today, but it would send a valuable message and immediately benefit many women just under the age threshold of 50 years.

Social Security reform is an important topic, but it’s really not relevant to Americans who are at or near retirement today. Lawmakers should spend more time considering ways to protect and improve the retirement security of our overlooked forgotten women, many of whom have worked incredibly hard and feel they have little financial security to show for it. Better policy at both the state and federal level can deliver more hope.

Hadley Heath Manning is the vice president for policy at Independent Women’s Voice (iwv.org).

This op-ed is part of a series about Forgotten Women—financially insecure women between the ages of 50 and 65—and policy solutions that can offer them hope. Learn more about the Hope Agenda from Independent Women’s Voice here. Originally appeared in RealClearHealth.

Women are living longer and working later into what should be their retirement years. While older Americans are more likely to enter retirement with greater wealth thanks to the growth in property values and retirement portfolios, women face greater financial insecurity. For many older women with little savings, unsteady employment, and health issues, thinking about retirement creates anxiety and fear. One hope for building financial security for women of different ages and marital statuses may be right over their heads.

The financial picture for many women aged 50+ is concerning. According to AARP Research, one in three women are very or somewhat worried about their current financial situation compared to just one in four men. Concern over finances is even more common among divorced, separated, or widowed women. Not surprisingly, they cite costs of living, living paycheck-to-paycheck, and difficulty managing money at higher rates than their male counterparts.

Women 50 or older are also worried about their financial futures. New polling from Independent Women’s Voice identified that 89% of women are looking for leaders to offer financial solutions for people who can’t find new work but can’t afford to retire. A GOBankingRates survey found that women are more likely than men to have nothing saved for retirement. Because they are more likely than men to have taken employment breaks to care for children or aging parents—48% of their lives versus 28% of men’s, according to Merrill Lynch—they enter retirement with less money saved. Nor do older women count on Social Security to be available or sufficient to sustain them.

Given that women’s life expectancy is six years longer than men’s, married women are likely to outlive their partner and their retirement assets, leaving them to figure out how to support themselves in their final years. Altogether, poverty rates for women 65+ are among the highest of any demographic. The burden of caring for aging women often falls on their daughters or daughters-in-law, as women are more likely than men to take on family caregiving tasks. These women may be approaching retirement age themselves, and also facing financial worry.

One asset that is far less susceptible to the whims of the market and that can provide long-term financial security is property. Women have overcome significant historical barriers—from being legally prevented from possessing homes and property until the 1830s—to now being major consumers in the housing market. Today, single women own more homes than single men; single women own 58% of the nearly 35.2 million homes owned by unmarried Americans, compared to 42% owned by men.

By itself, homeownership is inadequate to provide financial security. Property owners must be able to generate income from their investments. Renting out one’s property offers a host of benefits, including guaranteed monthly passive income, increased net worth, tax benefits, credit building, and savings for retirement. To be sure, being a landlady comes with a host of costly headaches, but it can provide financial freedom outside of the daily employment grind—something that many women may desire in their later years.

The challenge is that restrictions on land use, zoning rules, costly permitting processes, and restrictive regulations impede homeowners from turning unused dwelling spaces into domiciles for renters. A good place for policymakers to start would be allowing for and incentivizing the construction of multiple-unit or accessory dwelling units (ADUs) on single-family residential lots. Homeowners benefit from steady rental income and increased property values. Meanwhile, ADUs expand housing stock in a given area, which may improve housing affordability. For some families, ADUs may encourage intergenerational living situations and provide caregiving for young and aging family members.

ADUs come in many shapes and forms: duplexes and triplexes; detached structures such as tiny homes, backyard cottages, and granny flats; converted garages and workshops; additions; converted basements; and other spaces within homes.

Millions of ADUs may exist nationwide but operate outside of the government’s purview, which could lead to living in unsafe conditions.

State lawmakers recognize this is an area for reform, in some cases overruling restrictive policies of local jurisdictions. California reformed its housing policy to encourage ADUs in 2016. The results were rapid. Permitted ADUs grew from just over 1,000 in 2016 to over 24,000 in 2022 and comprise 19% of new housing permits. About 80,000 ADUs have been built since policy changes in 2016. Over a quarter (27%) of completed ADUs have qualified as low- or moderate-income units above the 20% for all new permitted housing. ADUs may not solve homelessness or the unaffordable housing crisis, but they are a start. And expanding housing stock is a much better direction than imposing rent control policies, which only suppress supply.

ADUs can boost a home’s value by 35%, but at a hefty price tag of $60,000 to $220,000. To help older and low-income homeowners afford the renovation and construction costs, cities like Boston, Charleston, and Orlando and states like California and Maryland are partnering with local organizations to offer grants and loans that would normally be unavailable in addition to guidance and relaxing onerous regulations.

Women are increasingly purchasing homes alone or will inherit properties from deceased spouses or parents. As high mortgage interest rates and inflation continue to make life increasingly unaffordable, policymakers can deploy these common-sense policy solutions to help these forgotten women use their biggest assets to build long-term financial security.

This op-ed is part of a series about Forgotten Women—financially insecure women between the ages of 50 and 65—and policy solutions that can offer them hope. Learn more about the Hope Agenda from Independent Women’s Voice here. Originally appeared in RealClear Health.

New polling from Independent Women’s Voice finds that 89% of women want policymakers to find financial solutions for people who can’t find new work but can’t afford to retire. One way to help these forgotten women with real financial fears is to clear bureaucratic hurdles that restrict flexible work and entrepreneurship.

Unfortunately, the Biden administration is about to make these fears worse and even more justified through onerous regulations on small business owners and increased restrictions or outright bans on independent contracting, to name a few.

Self-employed individuals in California who’ve lost their livelihoods due to AB5 (Assembly Bill 5) know all too well how anti-independent contractor policies disproportionately harm Americans closer to retirement age. On March 11, 2024, California’s cautionary tale will spread to all 50 states when new draconian, anti-choice regulations from the Department of Labor (DOL) restrict independent contracting nationwide.

Mirroring AB5’s strict “ABC” worker classification test, the new DOL rule, which imposes a six-factor worker classification test under the Fair Labor Standards Act, could impact more than 64 million Americans who choose self-employment as a career or a side gig.

Just as with AB5, older professionals will find themselves directly in the crosshairs of the DOL rule, given they are more reliant than ever on self-employment to address workforce challenges such as ageism.

A licensed pharmacist with a doctorate, Nancy Hall enjoyed a thriving, decades-long independent career inspecting pharmacies across California. Hall, in her sixties, lost her career overnight after AB5 was implemented in January 2020.

“I was gainfully supporting myself pre-Social Security,” said Hall, “and then AB5 struck and forced me to start taking withdrawals out of my IRA and take my Social Security retirement benefits four years early. This cost me compound interest and big reductions in Social Security. More importantly, it took away my ability to work flexibly part-time. I tried to get other jobs but I struggled to get hired because of my age.”

Although age discrimination in the workplace should be unlawful, many older workers say they’ve experienced it, according to a 2023 AARP survey.

Freelance writer JoBeth McDaniel recalls being told by a university administrator a few years ago that he would not hire anyone older than 34.

“He was in his 50s and he claimed anyone that age would be inept at new technology, except for him, of course,” said McDaniel. “I have friends who are struggling in retirement because they lost good jobs at age 50 and could never find another career position despite years of job searching.”

A 2017 field study bears this out. Conducted by the Federal Reserve Bank of San Francisco, the study revealed a 47% lower callback rate for older female applicants than young female applicants aged 29 to 31 years. For sales jobs, the callback rate was 36% lower for older female applicants.

Because independent contracting is vital to keeping pre-retirement women attached to the workforce, it defies logic that legislators insist on stifling the very independent career opportunities that help these women supplement their income, stay active, and maintain a sense of purpose.

Instead, lawmakers should protect worker freedom and flexibility for all independent professionals. This means eschewing the approach of AB5 and the forthcoming DOL rule. And it also means making it easier for Americans to start and run their own small businesses by decreasing barriers to entrepreneurship and work.

As Patrice Onwuka, director of the Center for Economic Opportunity at Independent Women’s Forum, testified before a Congressional committee, many of these barriers are government-imposed:

“Too many Americans face obstacles to building capital associated with high startup costs to launch a business,” she said, “not to mention credentialing challenges including occupational licensing and the unique challenges military spouses face in meeting each state’s requirements for a given occupation. All this unnecessary red tape can make business ownership a challenge for Americans of both sexes and any age. Restricting the use of independent contractors will only make it harder for women to start and run businesses and support themselves and others.”

If policymakers want to get serious about offering hope to the 89% of women who want pathways to greater financial security, they should focus on making it easier, not harder, to work independently. This holds particular benefit for many women who are approaching retirement age, who may find it hard to find or keep a traditional 9-to-5 job. The Biden administration shouldn’t forget women in this predicament, but instead, offer them real solutions. 

Karen Anderson is a visiting fellow at Independent Women’s Voice (iwv.org) and the founder of Freelancers Against AB5.