Wives like to retire around the same time as their older husbands – so they can play. But what a difference the baby boom generation has made.
For boomer wives, as members of the first generation of women to enter the U.S. labor force en masse, there can be a steep cost to leaving the labor force at a relatively young age to retire with an older husband. New research by Nicole Maestas of the Harvard Medical School bears out this logic.
It’s obvious that working wives can increase their earnings from work by resisting the urge to retire at a relatively young age. And married women generally earn much more, relative to their husbands, than in the past.
But, more often than their mothers and grandmothers, boomer wives can increase their own Social Security benefits by continuing to work.
To understand how this works, compare boomers with their grandmothers. Their grandmothers were probably housewives for most of their lives and worked sporadically or part-time. As a result, their husbands’ earnings determined the size of the spousal retirement benefits they received from Social Security.
The situation is very different for boomer wives, who often have worked enough to earn their own benefits and wouldn’t qualify for a spousal benefit. Social Security calculates their benefits, as they do for all workers, using the average of her highest 35 years of earnings. But here’s the rub: many boomer mothers still haven’t accumulated 35 years of substantial earnings, because they took some time off or worked part-time to raise children. … Learn More
One out of every 10 Generation X mothers is single – many more than in the generation born during World War II.
Nearly two-thirds of single older people are the survivors of divorce – far more than in the past.
About one in three couples has moved away from their hometowns and from both of their mothers – blame this geographic mobility on the growing share of U.S. workers who are college educated.
These are just a few of the dramatic changes in U.S. family structure and behavior that have developed over the past half century. These changes have had enormous financial consequences for everyone, especially women.
Squared Away has documented some of the financial impacts in previous blogs. A Lucky 7 such blogs, most of them based on studies by the Retirement Research Consortium, are summarized below (with links to each one):
Women are having babies five years later, on average, increasing their earnings substantially over their lifetimes.
About half of Americans don’t live near their mothers, creating new pressures for caregivers. This video explains who they are.
In the aftermath of divorce, many women figured out how to rebound in the labor force and earn more.
But when it comes to retirement preparedness, a doubling in the divorce rate since 1990 has put more baby boomers at a financial disadvantage.
Stepchildren, divorced parents, blended families – the structure of the parent-child relationship has grown more complex, and so have the parents’ wills. …
The stress of living with her son and daughter-in-law made Mary Roby’s blood sugar spike. But when she began her search for an independent senior housing community, affordable and nice never seemed to come in the same package.
Roby, who is 80, said she looked around quite a bit. A one-room place in the Boston area for $4,500 a month had no senior services, a limited kitchen, and was housed in a poorly maintained building. She also knew, through her son’s in-laws, about a high-end assisted living community with extensive services, but it charged more than $6,000.
Then she found Shillman House, which was both affordable and nice. “I love it here,” Roby said about the independent senior housing community in Framingham, Mass. …Learn More
After his wife of 36 years died from cancer, Dick St. Lawrence experienced something new: loneliness.
“Worst feeling in the world,” St. Lawrence, 81, said about Linda St. Lawrence’s death in the winter of 2014.
Like many widows and widowers before him, he had to build a new life for himself, despite having the comfort of a large family of four living children, six grandchildren and seven great-grandchildren. His first small step was accepting an invitation to play poker at Shillman House, an independent housing community for seniors owned and operated by Jewish Community Housing for the Elderly. The man who called to invite St. Lawrence knew a woman who used to play Mahjongg with Linda.
Next thing he knew, he’d sold their family home in Framingham, Mass., around the corner from Shillman House, and settled into one of its 150 apartments. Now he plays two poker games a week, works out at his old gym, and socializes with Shillman’s residents every evening in the dining room. At night, his Cairn terrier, Rusty, keeps him company during Red Sox games on television.
“I want to visit as long as I can,” Dick St. Lawrence jokes about his plan to spend his final days there.
The vast majority of baby boomers in an AARP survey said they want to age in their homes “as long as possible.” But when the rubber meets the road – in old age – the elderly often learn that isolation is bad for their psyche and their health.
There are downsides even to living in a community for independent seniors, with the constant reminders of the vulnerabilities that come with aging. When a Shillman resident suddenly becomes ill and is driven away in an ambulance, dread quickly spreads among the residents that he or she might not be coming back.
Still, they say, the positives far outweigh the negatives. All in their 80s, the seniors interviewed have visibly slowed down but are still enjoying vigorous social lives. …Learn More
Physical power, fast reactions, steady hands, a crisp memory, and mental dexterity – these physical and mental abilities, taken for granted in youth, break down slowly but persistently over the years.
A unique combination of physical and mental skills help to determine whether each worker’s continued employment is more or less susceptible to aging. To better understand who can work longer and who can’t, researchers at the Center for Retirement Research developed a Susceptibility Index to rank 954 U.S. occupations.
Using the skills required for each occupation in the federal O*Net database, they ranked the occupations from 0 to 100 based on the risk that age-related decline will affect a worker’s ability to perform that particular job. The risk reflects the number and importance of the age-vulnerable abilities.
Of course, individual workers experience aging in different ways, and some learn to compensate for declining skills. But there are dramatic differences between occupations with very high and very low Susceptibility Indexes.
As one might expect, physically demanding blue-collar work suffers the adverse effects of aging: rock splitter in a quarry (90.3 Susceptibility Index), floor sander (91.0), steelworker (94.4), commercial diver (94.0), truck driver (96.4), and oil rigger (98.5).
Occupations with very low indexes are primarily white-collar: interior designer (5.8), lawyer (6.3), aerospace engineer (8.9), loan counselor (12.4), and radio announcer (14.8).
Where things get interesting is in the middle rankings. Mixed in with somewhat physically demanding jobs – personal care aide (52.7), warehouse order filler (53.7), baker (54.7), postal service clerk (56.3), and food server (58.2) – are white-collar desk or hospital jobs. These include private detective (44.8), surgeon (51.2), architectural drafter (52.8), anesthesiologist’s assistant (53.1), computer network architect (54.8), and critical care nurse (55.7).
After ranking the 900-plus occupations, the researchers concluded that “the notion that all white-collar workers can work longer or that all blue-collar workers cannot is too simplistic.” …Learn More
Some suggestions for late-summer fun include an independent movie about a woman earning a very good living on a not-so-friendly Wall Street. But first, here are two practical financial guides, one for grown-ups and one for kids.
Harris (Hershey) Rosen, who is 83, put serious thought into how to leave household financial information in good order for his wife should he die – and put his thoughts together in his homegrown “My Family Record Book.” This book “is not a money-making proposition,” he said. Rosen suggests husbands and wives make this important task a joint project.
As the former owner of a candy company that made those lollipops packaged in strips of cellophane, Rosen learned to sweat details. His “Family Record Book” records the nuts and bolts of things like mapping where files are located in the house, planning the logistics of downsizing to a smaller home, and making lists for everything that’s important to you – doctors, the home-maintenance schedule, birth dates of friends and loved ones.
“The purpose of the book is to motivate people to commit all the information in his or her head to writing,” he said.
Susan and Michael Beacham are pros when giving financial information and advice to children and young people. I just came across their award-winning “O.M.G. Official Money Guide for Teenagers,” published in 2014, which merges personal finance and colorful graphics, while finding ways to get inside teens’ heads.
For example, it points out that “when you deposit a check, it may take several days” to clear and advises on how to handle “awkward money moments” with friends. A credit card is like a snowball, which “starts out fairly small” but “can get out of control.” If only they’d listen!
Movies about money – “The Big Short,” “The Wolf on Wall Street,” “The Smartest Guys in the Room,” “Glengarry Glen Ross,” “American Psycho,” “Bonfire of the Vanities,” “Trading Places,” and, of course, “Wall Street” – are about men. Until now. …Learn More
Dramatic changes in the U.S. family structure over several decades – more divorce, single motherhood, and unmarried couples – could have a big impact on the financial security of baby boomer women as they march into retirement – and on future retirees.
A review of studies on Social Security spousal and survivor benefits by the Center for Retirement Research, which sponsors this blog, examines the difficulty of providing retirement security for the growing ranks of women and mothers who do not fit the traditional family mold.
Social Security’s benefits were designed for the typical family when the pension program was enacted in the 1930s, a family portrayed at the time by Henry Barbour and his wife, Fanny, in the popular radio soap opera, “One Man’s Family.” A spouse, usually the wife, is guaranteed half of her husband’s full retirement age benefit under the program when she reaches her full retirement age – whether she works or not. When her husband dies, her survivor benefit equals his pension benefit.
But women who marry and become divorced within 10 years are not eligible for these benefits. Nor, of course, are single working women, who receive benefits based solely on their own work histories. Increasing numbers of women reaching retirement age today either were in short-term marriages or never married and won’t receive a spousal or survivor benefit. The problem is that most of these women are mothers. …Learn More