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My past writing on HD and numerous comments have made it clear my retirement is unique in that I have a good pension that together with our combined Social Security exceeds my working base salary the day before I retired. It also has been noted that my pension has given us a financial advantage by not being solely dependent on investments income. It’s all true.
But I have noticed that many people on HD are from couples with working spouses, two incomes, two sources of saving, two SS benefits, one possibly higher that a spouses 50% benefit. The opportunity in some cases to live on one income and save the other.
Money wise what Connie and I have after 56 years of marriage was the result of one income from July 1970 forward when our first child was born. Of course, that was our choice. Actually it wasn’t even that, Connie working after we had children was never discussed. We both assumed it would not happen. (Connie did work very part time in a doctors office for a short period – her doctor asked her to help out – when our children were grown.)
By default, our lifestyle was determined and limited by one income, an income that grew gradually over fifty years.
We eventually reached our financial and retirement retirement goals. Our advantage is a pension.
Was your advantage two incomes? How did (does) two incomes impact your financial situation? Necessity or advantage?
Both me and my wife started our career 40 years ago working for Texas State Government. At that point we have to contribute 3% of our income to retirement system. It is kind of force upon us, since we do not have any idea about retirement. I left the state after 12 years, when I turn 60 a few years ago, I got a monthly check around $1,600/month for life plus I will be qualified for state health insurance when I am on Medicare at 65. My wife worked with the State for 25 years, then retired from the State at 52 with a monthly pension of $4,500/month plus full medical benefits for life. She came back to work for Texas county last 12 years, any now qualify for county retirement of $3,000/month. So, in a year or two, we have 3 pensions and social security plus free health care. So I can say double incomes and pensions are the best for us, just pure lucky. We also stay in our current house for 25 years, the one before for 10 years, that I think save us a lot of money. Noted that the State/County only pay 70-80% of private companies.
Dual incomes? They’ve become important because the economy has responded to essentially doubling the labor force by seeing wages stagnate.
I suspect if you examined younger people, if they don’t have one exceptionally large income, they need the 2 to get close to a life style they want.
Perhaps the key word is “want.” I know during the first 30 or so years of marriage we didn’t have the lifestyle we wanted, we had the one we could afford.
what I can’t understand is how are house prices rising from their already staggering heights if nobody can afford to buy them. Prices can’t rise or be sustained if there are no buyers.
For us it wasn’t either/or. We benefitted from both a pension and 2 incomes. My pension was frozen after about 30 years, so I did miss out on service and salary credit for 5 of my highest earning years. My pension ended up being about 35% of my final year’s salary. Having two incomes in our highest earnings years helped us pay for college and max out retirement savings in the last dozen years prior to retirement.
We had our 2 sons in the first 3 years of marriage. I worked full-time, while finishing my engineering degree at night. My oldest son was 2.5 when he attended my graduation. My wife is a nurse and was able to work a variety of part-time and shift positions when our children were young. This allowed her to be heavily involved in the boys lives, as well as grow her work experience. Her income in these early years of our marriage was critical. It wasn’t always easy, and we had to juggle many balls at times, but it was well worth the effort. We also had some amazing support from our families.
She increased her hours and went full-time as the boys hit college age. Her varied and progressive work experience led her to management positions of surgery centers, and then to a position as a regional director of a nationwide medical management company that built and managed surgery centers in the mid-Atlantic states. Her career significantly contributed to our successful retirement. I’m incredibly proud of all she accomplished in her career, She did all this while being the best wife, mom, daughter, daughter-in-law, and friend I could imagine.
My thinking on this may not be correct, but it has always seemed to me extremely risky to make all reliance for income for an entire family based upon the income of only one person. If that person becomes disabled, how do the others manage?
I realize that disability insurance covers some of the need, but does this insurance have a COLA? What if the one and only breadwinner is disabled for 10-30 years? In addition to inflation eating away at the disability benefits, wouldn’t that person’s social security benefits also be frozen at the moment of disability, and therefore quite low?
Perhaps there is something here that I am not seeing. But I would always opt for both parents having enough experience in the workforce to bring in a decent income unless it is absolutely not possible.
Emilie, you raise some great points.
Long Term Disability Insurance typically maxes out around 65% of total income, and pays half that if Social Security Disability of Workers Comp is involved. That’s not a bad deal if the breadwinner has a policy, but very few people bother to buy this insurance. SSDI is adjusted for inflation, LTDI not so much.
Many HumbleDollar writers credit good luck for their financial success, and making it through to retirement without suffering a career ending disability certainly qualifies as that.
A common error of some husbands with high incomes married to spouses with modest incomes, or even none is to obtain life and disability insurance to protect against the loss of their higher income, but neglect insuring their spouses. I suggested to one that if something happened to his wife, he’d go broke hiring two nannies, a housekeeper and a gopher to take over the myriad of jobs she does. Its a useful exercise for such husbands, myself included, to run the numbers and learn just how valuable their contributions are.
Excellent point Jack!
If I could up vote that more than once I would do so.
I built a pension. That was one of the advantages of being the major shareholder in a small C-Corp. Of course, all of the employees benefitted, too. Because of my work record 1963-2022 I also earned a SS retirement benefit. I did contribute to a Roth-IRA until 2022. My spouse worked in the public sector and earned two pensions but also in the private sector and earned SS retirement benefits. She also saved via a SEP, 403b and Roth IRA.
I’ve never considered this to be extraordinary or unusual. We both practiced paying ourselves first via savings. In retirement our income has exceeded our expenses, our taxes are low (<9%) and these are what financially matters to us.
I think so.
Mrs. Smith took a full time job after the youngest went to school full time in the First Grade.
Her income was enough to ensure all our kids got out of college debt free.
Her pension and SocSec is really nice too.
This is a conversation I just had with my husband and “kids” (young adults) this weekend as we were at a family wedding and my husband’s older brother wants desperately to retire but is worried about the finances because he has been the primary earner in the family. My husband just retired and we are very fortunate that we will have 2 healthy pensions and saved as if we wouldn’t have much of one at all. There was a brief time when our kids were quite young that I wished I had the choice about how much I would work but luckily I had a career that allowed for flexibility so I was able to have leisurely mornings with them when they were little, getting them to and from school and being able to be an active and involved parent in their lives. Having said that, it was very stressful because I still had work that had to get done and typically happened late at night-so sleep became a casualty of this routine. As my 7year old daughter once said to me, “You’re not a working mom”, which I took as both a compliment and an insult:) However, I did make choices to turn down promotions because it would have meant less flexibility and family was my primary driver. Reflecting back, a dual income has been a huge advantage, not just financially but also for my sense of self and as a model for both my children about women’s multiple roles in society. There is no “one size fits all” but as we start to step into retirement at 59 & 60, that 2nd income has made it so much easier to do so.
We have had at least three advantages: 1.) timing medical and scientific careers to escalation of salaries and availability of stock options during our careers; 2.) working for two companies that sold to Fortune 50 companies for stock price premiums; 3.) long careers unimpeded by health problems to allow compounding to work. We could have made this work on one salary, so really choice of careers was the key factor in success.
Two income family here, although DH worked in schools after retiring from military so had summers off with the kids and hours that aligned closely to their schedule. My income as the working mother (engineer) was substantially more than DH. Since I didn’t take time off with the kids I retired early – military health benefits helped a lot! We now have 2 pensions and military pension has COLA, 2 SS payments, and 1 VA disability payment, plus a substantial retirement portfolio. Thus in a similar situation to you but 2 incomes resulted in multiple pensions/payments. (Actually 3 pensions for us; I forgot a small one DH gets from school system – his second career.)
There are, of course, other living arrangements besides long-time marriage with kids and one or two incomes. There are marriages with no kids, and single parents, either never married, divorced or widowed. There are also single people with no biological kids, again, never married, divorced or widowed. The timing of a divorce or death also impacts the finances of the person left behind. That leaves out the whole issue of step-kids.
These days women are able to find interesting and well-paid careers, plus they need to be able to support themselves in the event of divorce. If Connie had had the more interesting and/or better paid job, would you have been the stay-at-parent? If not, why not?
Sure, there are all kinds of families. Here we are talking about a couple, with or without children.
However, the work or not question probably is more relevant with children when there are decisions to be made.
My question was about the current and future financial advantages related to two incomes.
Let’s not get off on should or should not a woman have a career or the roll of a husband.
However, I will mention my Neolithic view because you raised the point.
My view, is simply if a woman married or not wants a career, she should have it.
However, if she chooses to have children, they become the priority over a career. And yes, just like with elder are, like it or not, the primary care giver is the woman, not that the man should not be heavily involved as well. Needless to say, when working is a necessity it’s a different matter. Choices are limited.
To put it plainly a career choice should not mean having someone else, some organization raise your children. I know of career women where the husband is stay at home and if that works for them as it appears to, that’s their business.
As far as Connie goes she had no interest in working. Her priority was the children. She volunteered for school activities and fund raisers through high school. She was the person teachers called when they needed help.
Our daughter who was a teacher with a masters degree is the same. She stopped working to raise her family. Now they are grown and because she enjoyed working with children, she works in a pre- school a couple of days a week.
No down arrows needed. I know there are different views. 🔻
My husband and I met in graduate school; there was no question whether I would have a career. The kids were the priority for BOTH of us. He did breakfast and packed their lunches every day; I made dinner EVERY NIGHT— no eating out or take out. Nobody else raised our kids.
As for life style, there was no creep. We still live in the house we bought in 1977 when he was the some earner. There
was never any big splurge on furniture or other household amenities— with both of us working, there was never time. We tried cleaning people a few times; they were a disaster. I did buy clothes for work— on sale—and we never had more than one car.
I confess that I would have been very unhappy as a stay at home. I don’t find cleaning bathrooms, vacuuming, etc very rewarding. But I absolutely believe that stay at home wives do play an important role in advancing their spouses’ careers. Men, who can be assured that all household tasks are done by their wives, can totally focus on their work and can be out of the house early each day and come home to dinner on the table. That is not the case for the dual career husband.
To be sure, my paycheck and pension benefits are substantial. But that money paid for college tuitions — not consumer goods! I was too busy to want to”stuff.”
How did you handle the pre-full time school years?
Just as an aside – not intended to relate to you or anyone here, but it stuck with me.
When my daughter was teaching 1st grade she had parent teacher conferences as is pretty normal.
On one occasion a child was struggling and she asked the mother in for a discussion. Since it was at the end of the school day the child was there with the mother.
Anyway, after a few minutes of discussion of the issues, the mother became frustrated and annoyed finally saying she had no time for any of this she had a job.
I bet that made an impression on the little boy.
I stayed home the first year of my children’s lives. I did, however, work as a contract writer during that time. Then, all went to half day pre school. I believe preschool offered important socialization opportunities. Both my husband and I were university professors, so we scheduled our classes so one of us was always home
in is the afternoon during those early years.
i would like to comment on your daughter’s experience. What happened was totally I inexcusable, but I’ll bet there are parents who would use hair appointments, social engagements, etc to cut short or not even show up at a meeting with a child’s teacher.
I’m sure you are right. I have two cousins who teach in the same school. Last Fall the school held its annual back to school night where parents came to meet teachers, learn about the curriculum, etc.
Not one parent in the school showed up. I don’t know how a teacher can remain motivated under those circumstances.
At one time having the mother stay home was the privilege of upper and middle class families – except the upper classes employed nannies to do the actual work. Working class women have always worked. In countries with decent day care arrangements there is no reason for women to stay home. Expecting women to quit work to become caregivers is particularly unfortunate, as they generally have lower pay to start with and therefore lower SS benefits.
The number of working married mothers peaked in 1995 and has been declining. In 2021, the labor force participation rate for all women was 56.1%.
“In countries with decent day care arrangements there is no reason for women to stay home.”
I’m not getting into it, but I find that statement very disturbing.
2021 is a tough year for employment data due to Covid. According to this BLS site the work force participation rate for married women, with children under 18, and with a spouse present, was about 72-73% in 2023 and 2024. It was slightly higher for women in other marital situations, the rate was about 77%. Interestingly, the rate for women with no children under 18 was about 52%.
Wonder if the lower rate for women with no children under 18 reflects an older age group?
Good thoughts, Kathy. Chris
Our pattern was very similar to yours. One income for the great majority of our married life. Lisa worked part-time for about a year in a clothing store, mostly for fun when the kids were older. She did a bit of temporary office work before the kids came along. In neither case was there a substantial impact on our joint income. Our advantage is pension (nothing like yours) and the benefits of 38+ years continuous employment that I was blessed with.
Hey Dick, someone downvoted my comment…now I’m like you, wondering what someone saw offensive in that post lol.
Not to worry Ken. There is no rhyme or reason to those .
Ken, I can’t understand how anything in your post was offensive, one of those upvotes is mine, we are far too quick to judge others for their opinion/experiences.
Wife not making an impact?
“In neither case was there a substantial impact on our joint income.” On income which makes total sense since she was part-time in occupations that are not high paying.
Thank you, Rachna. My wife has had immense impact in ways that cannot be monetized.
2 incomes we’re definitely a necessity for us. I was a blue collar guy (Teamster) living in a very expensive area, Northern California. My wife was a medical assistant. We had 3 boys in quick succession, all 15 months apart. We made it work due to the fact that I started work very early and was home usually by 3pm. My wife worked MWF. So even though we both worked full time jobs, we didn’t need that much day care. We managed to save a significant amount, put 3 kids through college, 2 with advanced degrees, the other an RN. With a union pension and 2 SS incomes, at 71 and 67, we have yet to touch our retirement accounts. Life is good!
Below is taken from my first HumbleDollar article. I had been divorced and eventually met and fell in love with the girl next door. This is how it went for us:
With the combining of our lives came economies of scale. Still, we didn’t change our lifestyle. Instead, Chris began contributing 20% of her income to her 401(k) and maxing out an IRA. I was maxing out my SEP-IRA, IRA and health savings account. Both Chris and I were piling up regular taxable account savings as well. We’ve achieved our goal….
I think a majority of couples now need two incomes to support the consumer-driven lifestyle that seems to be the default expectation for younger generations. This isn’t necessarily a bad thing, but some mindfulness around consumption could leverage the combined incomes for a higher savings rate than a single income would allow. The question is, will couples do so? Or does lifestyle creep doom the possibility. Suzie and I certainly had the advantage of twin incomes and definitely are in a better financial situation because of this.
I suspect these days with lifestyle expectations two incomes are a virtual necessity, but it should also be a savings advantage.
When we bought our first house the criteria was it must be affordable on my income which was quite low back in 1970. It was a house that even today most people would reject as inadequate.
That’s how it was during my first marriage when raising kids was the priority.