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
It was Gerry Smythe’s final confirmation he had never quite felt at home working in the Oklahoma airplane manufacturing plant. When well-meaning coworkers bought a cake to celebrate his and another person’s retirement, they got Smythe’s name wrong on the sign inviting everyone to the break room.
At age 63, he until recently was one of the nation’s 10 million older Americans working in physically demanding jobs in difficult conditions. He felt worn down by the factory noise, carbon dust, and standing all night on collapsed arches to assemble cabin floor beams for Boeing 777s. His requests for a transfer away from the hard floor never went anywhere, he said.
“It wasn’t really the job – I kinda liked the job,” said Smythe, who retired on May 27. “I didn’t want to stick in that environment in which I was dealing with air pollution and chemicals and decided I’d had enough.”
Now retired, Smythe savors his freedom. He’s playing more golf, has maintained his obsession with the Sunday crossword puzzle, and might volunteer at an animal shelter. But he also admits to something others have learned upon retiring: it’s a lot to get used to.
“You’re transitioning to a new phase of your life, and you’re not sure where to go. It is sorta scary,” he said in a telephone interview on a sizzling summer day at his home in Tulsa.
Everything is up in the air. He likes Tulsa but might move back to Tennessee – he once worked at the Memphis airport – or to Houston, where his mother’s family hails from. Or maybe he’ll find another job. The aviation industry is booming, so a few recruiters have called him. …Learn More
This profile is the first in an occasional series about individual baby boomers who either have retired or are facing the retirement decision.
Jane Kisielius is at that age – 63 – when she is being pushed and pulled between the work world and the retirement lifestyle that her husband already inhabits.
She retired once – temporarily – in August 2014 from a stressful job as head of the nursing team for the public schools in Quincy, a suburb southeast of Boston. But with her administrative and nursing skills in such demand, she was quickly sucked back into the labor market, this time as a part-time coordinator of a wellness program for Quincy residents. She was asked to help run the new, grant-funded education program after bumping into the commissioner of the Quincy Health Department.
“The job fell in my lap,” she said. “It was kind of hard to pass it up.”
So here Jane sits, wrestling with when she’ll really retire, as she drinks her morning coffee at the kitchen table in her orderly home, a stone’s throw from the historic home of presidents John Adams and John Quincy Adams. …Learn More
The wealth of good financial information available from government, university, and non-profit organizations is an antidote to the television and Internet advertisements selling financial products. Squared Away regularly compiles these resources for our readers’ benefit. This newest installment starts with some that are available in Spanish for the nation’s growing Hispanic population:
The FINRA Investor Education Foundation translated its short video about why people make bad financial decisions into Spanish. “Pensando Dinero: la psicología detrás de nuestras mejores y peores decisiones financieras” – or “Thinking Money” – explores how emotions get in the way of common sense when making decisions about money. Several other FINRA resources also in Spanish include a glossary of online financial publications and a video about financial fraud. (“Pensando Dinero” is based on a documentary produced for public television; a free DVD of the English-language documentary is also available.)
“Thinking Fast and Slow” by Daniel Kahneman was an international bestseller about behavioral economics. To explore another insider’s take on this field, read what one of the field’s founders says about it. Richard Thaler’s latest book, “Misbehaving,” will be published in paperback in May. A New York Times review called it “a sly and somewhat subversive history of his profession.”
In just two years, the housing boom taking place in many parts of the country has added $1 trillion to the value of home equity held by people ages 62 and older, reports the National Reverse Mortgage Lenders Association. For retirees wondering whether it’s appropriate to turn some of their equity into income, the Center for Retirement Research at Boston College, which supports this blog, has produced a booklet on ways retirees can use their home equity, including through reverse mortgages. The online version is free, and a paper version costs a whopping $2.75.
In the 1960s and 1970s, the baby boom generation had a reputation for breaking down societal norms for behavior – and they’re at it again.
Between 1990 and 2010, the rate of individuals over age 50 who become newly divorced in a year doubled to more than 10 people affected per 1,000 married people, according to Susan Brown, a sociologist at Bowling Green State University. Studies by Brown and others are emerging that show this important trend of “gray divorce” is having negative consequences for baby boomers’ financial security in old age.
“Individuals who go through gray divorce are considerably economically disadvantaged, and they are a growing demographic group,” Brown said. She estimates nearly 650,000 people over 50 were involved in divorces in 2010 alone. …Learn More
Some people might plan to work well into their 60s if they can’t afford to retire, or if they just think they’ll be around a long time. But this strategy is more difficult for women to execute than for men.
A study of employer discrimination in hiring found “strong and robust” evidence that female job applicants in their mid-60s were much less likely to be called in for interviews for low-skill jobs than were younger women. Evidence of age discrimination among older men was more mixed, or even non-existent in one occupation.
“It seems there was age discrimination for women – no matter what,” said Patrick Button, an economist at Tulane University.
To conduct their meticulously designed study, the researchers sent out more than 40,000 mock applications for jobs advertised online in 12 cities. The “applicants” fell into three age groups – 29-31, 49-51, and 64-66 – and submitted resumés in four job categories: retail sales, office administration, security guard, and janitor.
The results confirmed age discrimination, showing a clear decline in callback rates in three of the four occupations – administration, sales, and security – as the workers progressed from their late 20s and early 30s into their mid-60s. … Learn More