Is Ageism Hurting Your Finances?

The financial fallout from ageism can be devastating. Here's how to address this challenge whether you're 30 or 60 years old.

The fact that ageism is a reality in the world today is hardly a newsflash to women anywhere.

Countless among us have grappled with this very real challenge (64 percent of women say they've experienced age discrimination in the workplace). But what hasn't been quite as extensively covered, perhaps, is the financial fallout from ageism—specifically, the price women pay when they're impacted by such discrimination.

As AARP points out, the impacts of ageism might include everything from involuntary retirement due to age bias to part-time employment because of continual rejection for full-time jobs, missed opportunities for raises, or longer periods of unemployment compared to younger workers.

Each of these scenarios comes with a financial cost. For instance, many who face ageism choose to leave the workplace in question. But finding another role is often near impossible. According to AARP, about 76 percent of older workers say age discrimination is a hurdle to landing that next job, and 90 percent say that when they did, they earned less than at their previous positions.All of this is particularly disheartening for women: Due to longer lifespans and more years spent in retirement, the savings from their earnings will need to last longer.

So, what is one to do about the monetary costs of ageism? How do you compensate for it, or prepare in advance? (This a question that's particularly relevant if you're a young person because one day you, too, may face such challenges.) These are all important questions that warrant thinking about—as well as how to address ageism when you face it. Here are some of the ways to approach these hurdles.

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Shift the Conversation

First, some tactics for addressing ageism—or heading it off at the pass. Pam Krueger, creator and co-host of MoneyTrack on PBS and the Friends Talk Money podcast on PBS Next Avenue, suggests that one way to address ageism is by taking control of the narrative and redirecting it—or, as Krueger describes it, "turning the ship around."

Change the Narrative

"You need to think, 'Let me shift this conversation. Let me put energy into offering new thoughts at work, new ideas, and contributing in new ways,'" begins Krueger. "We often get into this rote situation as we get older. But we need to break out of that and put our 30-year-old hat back on and be bold, be vibrant, and be the confident person we were when we were 30. I don't think we can change society or an employer's frame of mind. But we can work on changing the circumstances by deciding to put on that 30-year-old hat again."

This redirecting of the narrative and finding ways to make your value clear can also have ramifications for your salary, says Krueger, who suggests thinking of bold ways to attach your salary to your worth.

"Don't sit back and take it; reclaim your power," adds Krueger.

Consider Becoming a Mentor

Perhaps another spin on this approach is positioning yourself as a mentor as you age, says Stephanie Redlener, managing director of talent strategy for the consulting firm Gather and founder of Lioness, an underground society for women leaders.

"Let's pair older and younger women to build a community in the workplace," says Redlener. "And create a bond between older and younger women, rather than create separation. Women, regardless of the age gap, have a lot in common, and there's a lot that can be learned through shared experiences." Amen.

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Start Your own Business

There are those of us who are more comfortable going the corporate route for the duration of our careers; then there are those who, when faced with the realities of ageism, opt to strike out on our own and start a business where such issues are largely eliminated.

In fact, leaving the corporate world and establishing your own business is a very real and viable alternative for many women when faced with ageism. Krueger has interviewed more than a few individuals who offer inspiring success stories on this front, opting to say goodbye to corporate life after 50 and become their own boss.

"If you have a skill set and a network built, you may find yourself organically and naturally having clients. And then slipping into that entrepreneurial role isn't as jarring," says Krueger, who suggests looking at how you can take your experience and contacts and convert them into a business that would not only pay you but pay you enough that you have the courage to leave corporate America behind as you age.

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Take Steps to Respond to the Financial Impacts of Ageism

As that AARP study made clear, there are a variety of financial ramifications linked to ageism. For instance, women are often the ones who leave the workforce to care for children or aging parents, and when they're ready to return to professional life years later when they're older, they find that their salary is not what it once was.

"Women are already fighting for equal pay. On top of that, by taking a leave and returning to the workforce, women have to start from the bottom more often than not and take lower pay," says Redlener.

This financial challenge is compounded by the fact that more and more women are choosing to start families later in life, well into their forties, which doesn't leave much time for regaining ground financially.

"What was at one point considered the age when women might be making a 'return' to the workforce is now the age at which women are starting families and having children," she says. "There isn't as much time to leave and come back."

Take Advantage of Your Benefits

One of the ways to address these sorts of money questions is to focus on making the most of the benefits you're offered by an employer when you do reenter professional life.

"When you do go back into the workforce, and you have access to company benefits, think about it this way—you work for 'Me Inc.,' not the company," explains Krueger. "When you walk into that building, and you're in your late fifties, look at every benefit you're offered and say, 'I'm going to squeeze out every drop of these benefits.' "

This can include a variety of actions. For instance, if you've never paid much attention to how your 401k contributions are invested, sit down with an expert and review all of the fees associated with the various fund options offered with an eye toward minimizing costs and maximizing growth. And while you're at it, ask a professional to help you identify ways to make the most of the matching 401k contributions from your employer if you're offered this particular benefit.

"Put your money to work harder than when you left the workforce," Krueger explains. "Getting back on track with your nest egg means you're prioritizing this effort and socking away money like you've never done before. And you're doing it in a way that's really smart. You need to have the mindset that every nickel does count."

Company stock purchase programs that allow for purchasing employer stocks at a discount are another opportunity you'll want to make the most of, says Krueger. Here, too, you may want to ask a professional to weigh in and offer tips for maximizing such a program.

Hire a Financial Pro

Perhaps most importantly, engage a professional financial planner to help you sort through all the options and possibilities. Ideally, you'll want to work with a fee-only professional (which means they don't work on commission) and ask them to help you review your overall financial picture and your benefits in order to help determine where you stand and how best to take advantage of every financial vehicle available.

"At 55, it's time to sit down with an advisor and to see clearly the reality of where you are, how long you're going to work, and how much you're going to need to earn," says Krueger. "Get those numbers clear in your head."

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Commit to Age Diversity Throughout Your Career

So what to do if you're a younger person faced with these issues as your career advances? In addition to financially preparing for such realities well in advance (everyone should have a financial savings plan), you may also want to be very deliberate about the selection of employers as you progress through life, says Redlener

"Seek out companies that are committed to age diversity and companies that employ women of all age ranges," says Redlener. "The same way we seek out companies based on their perks, like PTO, health benefits, and company culture—add age diversity into the list of criteria."

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Speak Up to Stop Ageism

Research from AARP and the Economist Intelligence Unit calculated the financial impact of age discrimination in this country—and the results were jaw-dropping. The report's data crunchers found that bias against older workers in the United States cost the economy an estimated $850 billion in GDP in 2018 alone.

"That amount—roughly equivalent to the size of Pennsylvania's economy— suggests that age-related bias in employment not only hurts older Americans but also damages the fortunes of the nation at large. By 2050, losses due to age discrimination could climb to $3.9 trillion, comparable to the current GDP of Germany," states AARP.

What's more, the study found that 57 percent of the $850 billion lost can be directly attributed to involuntary retirement. And finally, this fact from the report: One-third of that total lost GDP is from women being forced to retire sooner than they would prefer.

At least one way for women to start responding to this fact is by valuing themselves more. Starting now.

"When we start believing the narrative, it becomes a self-fulfilling prophecy. Often, we're valued even less because we're not valuing ourselves," Krueger says. "Don't be afraid to have conversations about your experience. You need to articulate your experience—because you might be contributing to the stereotype or persona without realizing it. You have to flip the narrative and say, 'I'm going to take power here' and in a really nice way, 'Let me show you how the experience I have can be very valuable.'"

So if you've been forced to retire sooner than you prefer, don't just give up. Reach out to your network and let them know that you continue to have a lot to offer.

But let's remember, as Redlener points out, not all of the work responding to ageism falls on us, the women impacted. At least some of the responsibility also falls to employers and society as a whole.

"Older women are keepers of wisdom. Take a look at any tribal culture, older women are some of the most respected women in the tribe. They hold wisdom through their experience that young people simply cannot because of their age," says Redlener. "We need to bring this thinking and belief system into organizations."

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  1. AARP, The Value of Experience: Age Discrimination Against Older Workers Persists. Accessed February 28, 2023.

  2. AARP, The Economic Impact of Age Discrimination. Accessed February 28, 2023.

  3. AARP, Workplace discrimination still flourishes in America. Accessed June 22, 2022.

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