#5 Gail Vaz-Oxlade – I’m a huge fan, keep up the good work!

We need a certain amount of money to live comfortably. After that the money is not so important as other aspects of our lives, of which our vocation (which may or may not produce income) is one of them. The goal isn’t necessarily to optimize/maximize retirement savings, but to have enough. Getting a degree can fit with “enough,” even if it doesn’t pay as much in the long term as not getting the degree.

Otherwise nobody would get a PhD– they pay less than masters degrees once you factor in opportunity costs of time in school. But the PhD is a job requirement for some pretty nice job positions, and for some people (not me!) they have a positive consumption value during the time in the program.

There are a lot of factors to be taken into account when deciding whether or not to get more education (and when/if to have kids!), not just how much money one makes afterward.

I’m going to play devil’s advocate here though: If someone waits to finish their degree until they have children, then doing part time school rather than full time keeps them out of the workforce longer, and they’re coping with the expenses of school at the same time as the expenses of parenthood. The resources that were there before the kids came along might not be available once they do. (Or rather, the priorities may change).

And if Tracy isn’t ready for kids now, how long is going to put off her goal of finishing school, and how will that ultimately affect her long-term financial goals? What would happen if she had her kids and lost her spouse? (or the spouse lost his job?) Would she be in a better financial position with that finished degree?

Like I said, just playing devil’s advocate here There are two sides to every issue, and ultimately it’s what works best for the person and his/her family.

If you’re talking about getting an English PhD, then do look at the employment and income stats for people with those degrees, especially from the schools you’re applying to. You may end up with your dream tenure track job but more likely you’ll have to adjunct a few years at little pay before landing a tenure track job in a place you may or may not want to live. In many sciences it’s the same thing but with a post-doc instead of adjuncting. You’ll have to think about whether or not the time spent doing it is worthwhile. A lot of people get those degrees and give up on the main goal after a while because there just aren’t enough jobs to meet demand, and regret the time spent. Some people don’t get the t-t job and move on but don’t regret the time spent because they enjoyed schooling.

Generally the advice is to start the family during or before getting the additional education if you’re planning on leaving the labor force to do so. (If you’re not leaving the labor force, then there’s no optimal time to have kids.) That way your new learning isn’t out of date when you want to get into the job market. You’re more attractive to employers with a new degree than with a degree that’s a few years old and no job experience in that field. Employers prefer the story, “She was out of the labor force taking care of children and now she’s going to be in it full time as evidenced by her commitment shown in getting this new degree” over “She went through the effort to get the new degree but did not want to (did she actually enjoy the field?) or was unable to use it (did no one want to hire her?) and may not be committed to the labor force.”

Part-time work or part-time schooling goes very well with child-rearing if you have the resources to make that work.

I went back to school to do a graduate degree, and sometimes worry about the time I missed in the workforce. However, besides the skills I learned, I also made great contacts, volunteered and worked to build my resume.

On the other hand, friends of mine who did their degrees and then immediately had kids lost this important momentum. It’s hard to get into the workforce even at the best of times, so it’s important to bridge the mommy gap with part time or freelance work in your field.

Best wishes, no matter what you do!

I have been saving for my retirement (through work and an IRA) since 2002, have a mutual fund and savings accounts, and have owned a house for over five years. I started when my mom sent my sister and me an invite to have lunch with her financial adviser and other women investors. Only when we got there did we realize it was intended for women who were recently divorced or widowed. These women were so happy to see us – both in our early twenties and thinking about planning for the future – and it was an eye opener to hear about their challenges. I started my IRA and a mutual fund soon after, and have participated in my company’s retirement plan since as long as I have been eligible. I started the paperwork to max my IRA contribution for last year and this year after reading through this post and the comments.

So, I worry about taking time off to finish my degree, although I think its an investment I can make (and have the resources with my partner to do so), and it would open a lot of doors for me when I finish, although we plan to think about starting a family soon after so it may be a few years before I am back full time in the workforce. I don’t think I will need to take loans to do so.

Has anyone done this and have any advice for me?

I like her message a lot more than the NYT article that was linked earlier, and I’m not just saying that because I’m a Till Debt Do Us Part fanboi. The NYT article seemed to focus on how her ex-husband did this to her. She mentions in passing that she wishes she’d focused on her own education more, but ends talking about how many other women are “discarded” by their husbands, as if divorce is a one-way street. She mentions having to make mortgage payments, which implies she got the house.

The problem isn’t the divorce, let alone whose “fault” it was. The problem is women being utterly dependent on their husbands. Like Gail says, it’s the Prince Charming syndrom. Marrying a man with a good job is not a career plan. It’s not even a financial issue, it’s an issue of unrealistic expectations. The sentiment seems to be “I don’t have to do anything I don’t want to, my husband will take care of that.”

If we want to change the statistics we have to do something different to bring more women in the loop. Obviously the women who comment on this site are, for the most part, already taking an interest in the financial area of their lives, but the vast majority of women in the US are too scared, intimidated, or overwhelmed to take action and get involved. 58% of baby boomer women have less than $10,000 in retirement… that is something that will only change if we can build awareness for women across the board.

BUT the credit card company doesn’t care if you just got divorced and you were on your husband’s credit card for 20 years… they want to know what YOUR credit is like. So does the mortgage company when you go to buy your new house.

The utility companys here also won’t hook up a new property without a credit check or a large cash deposit.

You need a bank account in your own name so that the other spouse doesn’t have signing authority on it and can’t drain it dry the day you (or he) says the marriage is over.

If “your” car is in his name, you can’t sell it to pay your first months rent when you leave… or to pay the mortgage while you wait for the life insurance to come in after he died suddenly.

Legally you are correct, practically you are wrong.

(all examples from clients or clients of my associates)

The unequal division of labor at home, unequal pay for the same work, sexual harassment at work, the restrictive gender roles that still permeate our culture (man makes the money, woman stays home with the kids), women’s limited earning potential because of the feminization of labor, restrictive family leave policies, lack of affordable childcare, sexism and racism in the hiring process and promotions, devaluation of work primarily done by women, flat out unpaid labor of mothers everywhere. This all contributes to those stats. And some women don’t have a choice about whether to “put their careers on hold to raise a family” It is just expected of them. Also, what about some stats and info about the experiences and challenges faced by women of color? Often they are experiencing racism AND sexism in the workplace and in society.

I would also add to the “What’s a Woman To Do” Section:
*support women’s equality
*speak out against sexism in all its forms
*donate time, money, or volunteer for groups that fight against discrimination in the workplace
*write your legislators and support legislation that works on better childcare policies or closing the pay gap

Also, men directly benefit from our society’s continued reliance and promotion of sexism. It is unearned privilege. Men benefit financially and in their careers when their wives stay home with the kids, they benefit from the second shift of housework and childcare responsibilities that often fall to women. Where is the “What Can Men Do” Section?

@ Bucksome — One year at RRSP season I was chatting with married friends about how hard it is to financially plan when you don’t know what the future holds (i.e. Do I keep planning as if I’m always going to be single?) They laughed at me and said even though they were married they were still funding their own retirement because “you never know what will happen”. That really put things in perspective.

I remarried seven years later. My DH has different investment outlooks than I but we will probably be okay in retirment–he invests in real estate and me in the stock market. While we are still paying over $1100 a month toward alimony and child support, we are making progress on our own financial picture.

Bottom line: it’s never going to be perfect but you need to be responsible for yourself and for those with whom you have become involved.

Even though I write about personal finance, Mel (#29) stated exactly how I feel. My eyes glaze ove when I encounter posts about EFTs and buying gold. However, I do have a 401K and am on the road to a comfortable retirmeent.

So, yes, I think the earnings gap is real..because time off can be a real negative. And you also can be put on the mommy track whether you want it or not. Some people just assume you don’t want to travel anymore or whatnot because you have kids…even if you never said that yourself.

There’s no crystal ball that tells you what the future has in store for you. You may end up needing to be the bread winner for many reasons (not just divorce). I want to make sure I can always take care of my family if I need to.

As the primary breadwinner for our family, I think it is important for stay-at-home MEN to consider several of the points as well — my husband has a hard enough time dealing with being a “trophy husband” but it also definitely puts him at an economic disadvantage (i.e. no access to a 401K etc.).

This is something that as a woman hell-bent on protecting myself and being self-supporting, I had a hard time understanding at first. Now I realize that all the reasons I am so driven not to have to rely on anyone — are the same reasons I have to ensure my husband doesn’t face the same pitfalls. Not just because he’s my husband and I love him, but because he has made sacrifices for us to be successful as a family.

Debbie @37, being single and childless is probably the best thing you can do for your career, sadly. (I don’t mean that it is sad to be single, childless or both; only that these choices affect women in a way they don’t affect men.)

As for women wanting to be the one at home… we often think we want what people expect of us.

@Debbie M
” it’s funny to me that you think younger women have an advantage. I think people like me raised during the feminist movement in the 1970s have an advantage because…”

Kids these days, they just don’t try as hard anymore, they take all our hard work for granted! To see some lively 20-35′s chatting it up about feminism, start at feministing.com. There’s some good reading on 2nd vs. 3rd wave feminism somewhere up there… and all of the generational fighting and finger-pointing that we need to STOP. Our overall fight is the same. If you’d like to change the focus of feminism today, then get active!

@guinness416 – completely agree.

That’s not to say that the “trained to ask guys out” 1970s feminists have a pass to stop fighting the good fight though. Nor us in the younger generation.

“Women make less.”

“If you don’t have enough money to retire, work a few more years.”

That about sums it up for me.

People are more than statistics. We all know what we should do, and these numbers can show trends, but there are so many dynamics involved that I am a little dubious of any conclusions (such as ‘we need women oriented investment advice’).

And as far as the conclusions about retiring later/working longer: your financial picture is the sum of your financial decisions over the course of your life. Did you go to college? Did you start saving for retirement in your 20s? Some divorced women who worked very little have better retirement than those that worked their whole lives because they were smarter with the money as a couple, not because they earned more or necessarily retired later.

I make decisions based on my specific situation and it has nothing to do with being a woman.