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Lean Times Ahead?

Kristine Hayes, 3:07 am ET

THE HEADLINE GRABBED my attention—because it seemed to speak to my situation: “Planning for Retirement: Women in Two-Income Households at Highest Risk.” The article suggested that women in their 50s in two-income households are at greater risk of being unable to maintain their preretirement standard of living when compared to single women and women in one-income households.

A big factor: Dual-income households tend to save a smaller percentage of their income compared with single-income households. The article also cited less-generous Social Security benefits for dual-income couples than for those with only one wage earner. In addition, the research found that two-income households tend to spend more on fixed expenses such as mortgages and car payments.

I don’t dispute the findings. As someone who in the past decade has been both single and married, I know I managed to save a larger percentage of my salary when I was single. That was because I chose to lower my standard of living, opting for an apartment and a used car, rather than owning a house and buying newer vehicles.

Where the study is flawed: It assumes I wouldn’t be willing to lower my standard of living again. When I leave working life behind, I’ll be willing to forgo certain luxuries. In planning for retirement, my husband and I don’t expect to maintain a dual-income lifestyle. Our goal is simply to have more time together doing activities we both enjoy.

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Catherine
Catherine
1 month ago

Your expectations for retirement seem fine, especially not worrying about maintaining your current living standards. The caveat being that you (or your husband) might not have a spouse with whom to enjoy activities. It’s a wrinkle worth your joint consideration.

Catherine
Catherine
1 month ago

Here’s what strikes me:
“… women on average earn about 20% less than men, receive less in Social Security benefits, and accumulate 32% less in retirement savings. Women also are more likely to have inconsistent work histories due to caregiving responsibilities, which can interfere with their ability to save for retirement. Partly as a result, women are projected to have 42% less retirement income than men.”
I change what I can and deal with what I can’t. I’m especially annoyed that basically 100% of married women’s social security payments are freebies to the federal government, up to the point where their earning history would result in them getting higher payments than if they’d never worked at all. (spousal benefits a residual effect of the late 19th/ early 20th century “family wage” concept of employment.)

Paula Karabelias
Paula Karabelias
1 month ago
Reply to  Catherine

I’m not sure I understand your comment that 100%of married womens’ social security payments are freebies to the government. Can you explain further ? If the spousal benefit is higher than their own, then they apparently worked in a low wage occupation . That seems less common than it once was. Most of the dual earners I see today are both high earners. I also can’t argue with the study, but like some others here we always lived off one salary,invested the other and retired early

IAD
IAD
1 month ago

I can’t argue with the study, but if accurate then its pretty sad. We live off my salary and bank my wife’s, so 100% of her take home salary is saved. The problem for the majority of married dual-income is lifestyle creep and children…both are expensive! We set our lifestyle when childless and only adjusted upwards slightly since then when we had our kids.

kristinehayes2014
kristinehayes2014
1 month ago
Reply to  IAD

I know a couple who used the same strategy: live off a single salary and bank 100% of the other. Their primary goal in doing so was to allow them both to retire earlier-than-most and then spend a few years travelling. It seems to have worked for them.

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