When a Woman’s Work Is Done

One of my jobs at The Motley Fool is to serve as the internal financial planner for Fool employees. Lately, however, I've been answering more questions my colleagues have about their parents — and it's more likely about their mothers or mothers-in-law. The truth is, women face a more difficult task when it comes to retirement planning, for several reasons:

Women earn, and have, less. According to the Census Bureau, women earn just 77% of what men make. They are also more likely to interrupt their careers to raise children or take care of older relatives. According to the Social Security Administration, the typical woman spends 12 years out of the workforce. This results in lower retirement benefits and smaller portfolios. On average, a female's 401(k) is 40% less than a male's.

Women live longer. Generally, retirement begins when a person leaves the workplace and ends when life leaves the person. The longer someone lives, the longer retirement lasts — and the more assets will be needed. On average, gals live five years longer than guys, which means they tend to be retired longer. Add to this the fact that, with most couples, the wife is a few years younger than the husband, and you can see why most women should plan on spending their last few years on their own. Which leads us to…

Women are more likely to spend part of their lives single. Though my wife may not believe it, marriage enhances retirement security. According to a National Bureau of Economic Research study by Susann Rohwedder and Michael Hurd, 80% of married couples in the 66-69 age group are adequately prepared for retirement, whereas just 55% of single persons have enough resources. Unfortunately, more than twice as many older women are single than older men. According to the Census Bureau, 19% of men over the age of 65 live alone, compared to 40% of women in the same age group. More than two-thirds of 85-year-olds are women.

Women tend to retire earlier. According to the Center for Retirement Research at Boston College, the average retirement age for men is 64, whereas the typical woman retires at age 62. This is often because a wife will retire at the same time as her husband. It's just another reason why women can be expected to fund a longer retirement than men.

Women often leave financial planning to their husbands. According to a survey from ING Direct and Dailyworth.com, 40% of married women leave retirement planning to their partners, and almost 30% say they don't know what their main source of future retirement income will be. This leaves widows and divorcees vulnerable when they find themselves single again, and could contribute to a general lower knowledge about money matters. According to studies by Dr. Annamaria Lusardi, director of the Financial Literacy Center, women score 12 percentage points lower than men on tests about concepts such as inflation and diversification, as well as other measures of financial literacy.

What's a Woman to Do?
While all those statistics can be discouraging, the good news is that there are plenty of solutions. Here are the steps all women (and the men who love them) can take.

Become a money master. Regardless of whether you're single, married, or living in a hippie commune where no one bathes but someone has to pay the bills, make sure you keep learning about financial planning and have a hand in the household finances. According to a study from Hartford Financial Service and the MIT AgeLab, couples who share the financial housework are more prepared than couples that rely on just one member to do all the financial lifting; the former group is more likely to have saved more and developed a plan for what will happen when one spouse passes away. This doesn't mean that each spouse must do everything together, but it does mean that each spouse should know enough about what's going on, and how to manage the family finances in the case the other spouse becomes ill or passes away.

Manage the couple's benefits with the survivor in mind. The timing of when one spouse begins receiving Social Security and pension benefits (if any) can affect the financial security of the other spouse. The questions to ask are: 1) Will the primary beneficiary receive a larger benefit for delaying, and 2) how much of the benefit will go to a surviving spouse? In the case of Social Security, the benefit does increase for each year of delaying, which can be very important source of income for a retiree whose lifetime earnings record is not as high as her or his spouse's, because that higher benefit will continue to the lower-earning spouse when the higher-earning spouse passes away.

Be ready to be on your own. The last time I covered this topic in a GRS post, a reader linked to a New York Times article, written by a woman who had once been an advocate for stay-at-home motherhood:

So I was predictably stunned and devastated when, on our 40th wedding anniversary, my husband presented me with a divorce. I knew our first anniversary would be paper, but never expected the 40th would be papers, 16 of them meticulously detailing my faults and flaws, the reason our marriage, according to him, was over….

The judge had awarded me alimony that was less than I was used to getting for household expenses, and now I had to use that money to pay bills I'd never seen before: mortgage, taxes, insurance and car payments. And that princely sum was awarded for only four years, the judge suggesting that I go for job training when I turned 67. Not only was I unprepared for divorce itself, I was utterly lacking in skills to deal with the brutal aftermath.

I hate to be so cynical as to suggest every person should be ready to become single at any moment, but I do think everyone should have a Plan B at the ready.

Delay retirement until everyone is ready. The decision to retire should not be based solely on whether both spouses have enough money to cover expenses, but also on whether a surviving spouse would be secure should the other spouse pass away. According to the Hartford study, the typical widow sees her income drop 50% when the husband passes away, yet expenses drop just 20%. To make sure they have enough in their later years, people should continue to work — and save — until they have enough to survive on their own, and not retire just because their spouse does.

Everyone should know the team. If you use any financial-services professionals — accountants, advisors, attorneys — both spouses should know at least enough to know what they do for you, and how to contact them. If you don't use pros because one spouse does the work, you may want to begin assembling a team in your later years to smooth the transition in case that one spouse is no longer able to do the job. You can start with a fee-only financial planner, such as those who belong to the Garrett Planning Network or the National Association of Personal Financial Advisors.

The Times, They Are A-changin'
These kinds of posts can be tricky, since they're based on generalizations that obviously don't apply to every woman or couple, and can come off as sexist. To be sure, I know plenty of couples in which the wife is in charge of the household finances. These folks tend to be younger, which is why I think the difference in retirement prospects for women and men is partially a generational issue. It's certainly my experience that women in their 70s — like my mother, who found herself divorced and re-entering the workforce in her 50s — are more comfortable leaving all the financial housekeeping to their husbands, and also less comfortable talking about money. Maybe that's just my personal experience. But I do hope, as the income gap between men and women shrinks, and more men share in the child-raising responsibilities (for example, The Motley Fool offers paternity leave to new dads), that a post like this will be largely unnecessary several years from now.

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david
david
8 years ago

Hi Robert, I would just like to point out that many women earn more than men.

I had four (4) female bosses at the same time. They all made more than me.

The boss above them was female as well and a company executive. There was no chance that I could see for me to move up.

So, I would not say that women earn less. On average, perhaps that is true.

Individual cases vary greatly. Many women earn more than men and we should not lose sight of that.

Elizabeth
Elizabeth
8 years ago
Reply to  david

Part of the reason that women — as a whole — earn less is that they’re more likely to be part time, in lower paying positions or fields and less likely to take overtime (especially if they have kids.)

The stats are just averages. There are women earning as much as men or a lot more, and then there are women who are earning a lot less.

Tom
Tom
8 years ago
Reply to  Elizabeth

I think part time jobs are factored out.

I believe when studies control for occupation and industry (comparing red apples to red apples, so to speak), women and men are fairly compensated. In general, more women work in lower paying fields than men.

Bella
Bella
8 years ago
Reply to  Tom

Thanks for the chuckle – in fact women doing the same job – red apples to red apples – earn less on average than their male counterparts. Why do you think that the laws regarding filing for pay descrimination just got extended? Because it isn’t happenening? No, it’s just that there is a very good network in place to prevent women from knowing how much less they earn, that frequently one would not be aware of the discrepancy until well after terminating employment with said employer. Yes, women are more likely to be part time, to take time off, to… Read more »

Kat
Kat
8 years ago
Reply to  Tom

But discrepencies for pay in equal jobs isn’t necessarily due to discrimination. Part of it is that women as whole are less likely to negotiate a higher salary, or ask for a raise. They are more likely to accept a job offer without asking for more pay, and they dread asking for more money. I know there are exceptions to the rule-myself included-but statistically speaking, men are more likely to ask for more money. That’s not the companies’ fault. http://www.npr.org/2011/02/14/133599768/ask-for-a-raise-most-women-hesitate

jim
jim
8 years ago
Reply to  Tom

As Bella points out there is still disparity between men and women salaries when comparing red apples to red apples. However that disparity is not as high as some people may assume. Here’s one study about engineering pay that found when experience is controlled for that women engineers made 97% of what men make. http://www.nsf.gov/statistics/issuebrf/sib99352.htm So yes theres a disparity of 3%. But its not 30%. Of course thats just one study about one field and I’m sure the details vary across industries and occupations. On the other hand you could argue that comparing red apples to red apples isn’t… Read more »

Elizabeth
Elizabeth
8 years ago
Reply to  Tom

I would love to know how one compares red apples to red apples 🙁 Someone with my exact job in another province earns more than I do simply by virtue of cost of living and market demand. Some industries pay more than others even for the same position.

There are so many variables, it makes me wonder how useful any of these statistics are?

Marla
Marla
8 years ago
Reply to  Tom

Actually, in terms of engineering, its much more difficult for woman to get into the higher pay grades. At the onset we may be paid equally, but it breaks down as you get further into the old boy’s club. 😉 Qualified, competent woman are passed up for promotion simply because a man “looks better” in the position, for the shareholders and the clients.

Jen from Boston
Jen from Boston
8 years ago
Reply to  Elizabeth

Also, maternity leave will cut into your **lifetime** earings. While I and a male colleague doing the same work make the same salary, over our lifetimes I could end up making less because I had to take more time off for childbearing.

Jen from Boston
Jen from Boston
8 years ago
Reply to  david

But your situation could be unusual. And, even if women in your field earn more than men, that doesn’t mean that they are earning more then men in the entire country’s workforce on average. Plus, I’m sure those women could find examples of men who make more than they do!

Kevin
Kevin
8 years ago
Reply to  david

The plural of “anecdote” is not “data.”

Slccom
Slccom
8 years ago
Reply to  Kevin

Yes, Kevin, at some point the plural of “anecdote” is data. Where do you think that data come from?

Kirsten
Kirsten
8 years ago
Reply to  david

You do realize you stated they were your bosses, right? So, I would hope they make more than you.
In regards to this comment: “So, I would not say that women earn less. On average, perhaps that is true.” Are you suggesting we should instead be making statements and writing articles based on the outliers instead of the average?

Katie
Katie
8 years ago
Reply to  david

Nice anecdata. They’re your bosses, I would hope they earn more than you!

Barber
Barber
8 years ago
Reply to  david
Megan
Megan
8 years ago

HECK YEAH to having a plan B.

I know many women my age who are SAHMs because they have kids, and they all have at least two kds. Quite a few have been out of the workforce for the better part of a decade, and I don’t know what they will do if, heaven forbid, their husbands want a divorce, die, or have a debilitating injury.

LauraElle
LauraElle
8 years ago
Reply to  Megan

Second the Plan B. I’m a SAHM trying to re-enter the workforce. I made a point to keep my skill set current and do volunteer work that utilized that skill set. [I was a technical writer.] I invested time and money taking classes to maintain and enhance my skill set. I kept in touch with former co-workers so I could network. But has it helped? Not one bit. The moment an employer sees the gap in my employment history, and determines that I stayed at home until my son was school aged, it’s, “Thank you so much for coming in.… Read more »

Erika
Erika
8 years ago
Reply to  LauraElle

LauraElle – this isn’t related to the original post but to your situation. I hope you consider freelancing or repositioning yourself if you really want to get back into technical writing. I do copywriting and rarely show anyone a “resume” — I just have a portfolio and website with the kinds of writing I do. There have got to be ways around your situation!

Megan
Megan
8 years ago
Reply to  Erika

Erika brings up a great point about writing. I’m a freelance writer, and I always have at least one gig at any given time. My resume is “current,” meaning my last listed job is still going on today (*knock on wood*).

schmei
schmei
8 years ago
Reply to  LauraElle

My husband and I were just talking about this. If a man stays home with children (like my husband is currently doing with our son), employers seem to see that as a noble sacrifice. But if a woman chooses to do the same thing she has a much more difficult time getting back in to the work force… it’s like employers think that SAHMs parked their brains permanently, but SAHDs were enriching themselves. It’s very frustrating.

That’s not helpful advice or anything, it’s just commiseration, I guess. Good luck to you with the job search!

Andrew
Andrew
8 years ago
Reply to  LauraElle

The past 4 years have been some of the worst ever for people looking to get hired. You don’t know for sure that your stay-at-home status is the reason you haven’t yet found a job. In some industries there are hundreds of qualified applicants for every opening. It’s getting better of late, but it’s still far from a healthy market. It’s easy to get discouraged, but please don’t make assumptions that will only end up getting in your way. If you truly believe that the deck is stacked against you, you will probably be communicating that defeatist attitude in subtle… Read more »

Marsha
Marsha
8 years ago
Reply to  LauraElle

I hope you have your volunteer work listed on your resume right along with your previous paid work. Work experience is work experience, whether paid or not.

And like another reply stated, this is not the best economy to be looking for a job. You can’t compare today’s job climate with the climate several years ago. It’s going to take longer to find a job, not just for you but just about anyone else.

elysia
elysia
8 years ago
Reply to  Megan

Heck Yeah to having a plan B from me, too! I stayed at home for a few years with my kids, but then trying to find a way back to work was so hard! It’s hard to find a job that’s close enough, flexible enough and pays enough for it all to work out. In most relationships, one of you simply has to be able to pick up the kids if they’re sick or be home for all those half days. Plus cover child care costs… It is really hard to find a job that does that and pays well… Read more »

Rosa
Rosa
8 years ago
Reply to  elysia

We fund my Roth partly to make up some of that discrepancy. I consider it wages for housework, personally (we pretty much split childcare evenly, but when I am not working/working less the other stuff is my job).

Part of the retirement picture is that if you are married to a higher earner, you will get social security benefits based on their salary whether you worked or not, so for that part of it, working is pretty much irrelevant unless you make more than your spouse.

Amanda
Amanda
8 years ago
Reply to  Rosa

1/2 of the higher earning spouse’s SS may not be more than your full earnings.

Trina
Trina
8 years ago
Reply to  Rosa

Good point. Unless, of course, you’re a gay or lesbian couple. Then you get to pay into social security your whole lives and not get the full benefit that other people get.

TB at BlueCollarWorkman
TB at BlueCollarWorkman
8 years ago

This is a well-written post, don’t worry about being sexist. Stats don’t lie (well, unless you cook ’em ;-)), but the advice here can apply to everyone, woman or man.

Karl Marrion
Karl Marrion
8 years ago

Yes, Men often seem to get the best deal, and it’s not really fair. I also don’t think it’s sexist as you are just sticking to the facts. I definately think things are changing though. It’s been a long slow process, look how far things have come over the decades.

Kevin
Kevin
8 years ago
Reply to  Karl Marrion

It really boils down to two simple things. 1) The immutable biological fact that only women can carry and give birth to children; and 2) The fact that women choose lower-paying professions. Driving rivets 60 stories up on a skyscraper skeleton is dangerous, hard work. Removing a driveshaft from a 2,000 hp diesel engine is dangerous, hard work. Repairing a 10,000 volt transformer atop a 200 foot tower during a rainstorm is dangerous, hard work. These jobs are overwhelmingly staffed by men. Teaching children appeals to people with a nurturing instinct, is not dangerous, and doesn’t require physical strength. Ditto… Read more »

Andrew
Andrew
8 years ago
Reply to  Kevin

Just because a person spends 4 years in an office doesn’t necessarily mean that they have done anything of interest or learned any new skills.

Curtis
Curtis
8 years ago
Reply to  Andrew

It’s not just due to stereotypes and bias. There’s a lot of scientific evidence showing that genetic hard wiring is also involved.

The differences between men and women are more than “slugs and snails and puppy-dog’s tails,” while girls are “sugar and spice and everything nice”.

Kirsten
Kirsten
8 years ago
Reply to  Kevin

Women do not “choose” those lower paying professions. Society creates these ideas that certain professions are for men and certain are for women (this goes back for decades, and it doesn’t help that women have not been in the workforce as long as men). It is 2012 and women do have so many options and can be whatever they want to be, but at the same time we are getting feedback from older generations, from the media, from pop culture saying that we shouldn’t be in certain professions.

Kevin
Kevin
8 years ago
Reply to  Kirsten

Kirsten: Right, women can choose the higher-paying professions. But they don’t. There are lots of possible reasons why that might be, but the fact is, women are free to pursue any career they want. When 18-year old girls graduating from high school are given a college syllabus and asked what they want to study, on average, they tend choose fields that appeal to softer, nurturing personalities (and also pay less) moreso than their male classmates. What’s the alternative? We force them into oil rigging and the military, even though they’d rather manage a charity? I’m just saying that I feel… Read more »

Kirsten
Kirsten
8 years ago
Reply to  Kirsten

Kevin: “When 18-year old girls graduating from high school are given a college syllabus and asked what they want to study, on average, they tend choose fields that appeal to softer, nurturing personalities (and also pay less) moreso than their male classmates.” I’ll agree with that, that statistic is probably true. However, this is caused by stereotypes and bias that teach young girls (well before they are 18) that they aren’t good at math and science disciplines; and if they are then they are nerdy and/or masculine. If you would like to do some reading help yourself, then decide if… Read more »

Teri
Teri
8 years ago
Reply to  Kirsten

If you’re getting negative messages from older generations or wherever – ignore them. I went to law school 30 years ago when women were just starting to do that in greater numbers. Do what you’re good at and ignore the naysayers.

avt
avt
8 years ago
Reply to  Kirsten

Kevin: it’s about oppression of women! None of what you are saying takes into account the systematic oppression of women and that is what Kirsten is speaking to. You should check out some feminist blogs like feministing.com or sociologicalimages.org to learn more!

Sarah
Sarah
8 years ago
Reply to  Kirsten

“Do what you’re good at and ignore the naysayers.” This advice is in the right direction, but it’s important to realize that women often underestimate their own performance and ability. They often think that because something is hard, they must not be good at it. I’m a female scientist in theoretical and computational biology. I’m in academia, which requires strong drive, persistence, and self-promotion. If you consistently doubt yourself, you will not allow yourself to do exciting but hard research, and you will not attract collaborators and funding. The upper echelons are dominated by men not because they are more… Read more »

Anne
Anne
8 years ago
Reply to  Kevin

You do realize that the 77% is for work in the same industry doing the SAME job. Let’s look at two construction managers at the same firm, acting as government consultants. We’ll call the lady Anne and the gentleman Captain Friday. Anne and Captain Friday, are the same age, have the same degree (although hers is from a more prestigious university), and similar work experience prior to joining this firm. At about their 4th year of experience in the field, they have the same salary. Both are sent to BFE on no notice, etc. etc. BUT Captain Friday is “adopted”… Read more »

CJ Belle
CJ Belle
8 years ago
Reply to  Anne

+1 (times 10).

Bella
Bella
8 years ago
Reply to  Anne

Oh Anne – this was awesome!
There were so many thing wrong with that orginal post – I couldn’t quite to get to all of them – but Captain Friday sure hits it home.
And you’re right – anything usually means “Anything But fixing what’s really wrong!” 🙂

Kirsten
Kirsten
8 years ago
Reply to  Anne

Anne – I am only a couple years out of college with an engineering degree and I just wanted to say, Thanks for being a female in the engineering field and helping to pave the way for young female engineers after you!

Kevin
Kevin
8 years ago
Reply to  Anne

“You do realize that the 77% is for work in the same industry doing the SAME job.” Maybe I’m naive or simply uninformed, but no, I don’t “realize” that. I don’t think that figure is accurate. I don’t think it compares apples to apples. I think it glosses over any number of subtle differences, such as accreditations and certifications, experience level, extra work study, plain-old assertiveness in asking for more work, hours in the office, willingness to put in the overtime (who is expected to put work ahead of family? Men, moreso than women), extended leave periods, and more. FMLA… Read more »

Nicole
Nicole
8 years ago
Reply to  Anne

@Kevin As a woman in a male-dominated field who has to work harder and be smarter to get less money than most men in the same field (and did not get any maternity leave with her first child)… I suggest you check out this Scalzi post: http://whatever.scalzi.com/2012/05/15/straight-white-male-the-lowest-difficulty-setting-there-is/ (He’s a white guy, so you should feel comfortable listening to what he has to say, not like what those women who are only good at nurturing, which for some reason pays less, say.) Also… to be technically correct, that 77 cents number *does* include women’s different occupational choices and amount of time… Read more »

Bella
Bella
8 years ago
Reply to  Anne

@ Kirsten – don’t get discouraged by what you read here today – despite my complaints (and others) Engineering is a really great field to be in. Hopefully when you have been in 10-15 years we’ll have made a lot more progress on the gender gap (hey, one can always hope right). Realize that you may have to ask for what you are worth more often than your male counterparts – but that doesn’t means you aren’t worth it.

jim
jim
8 years ago
Reply to  Anne

“You do realize that the 77% is for work in the same industry doing the SAME job. ” No, you are wrong. The 77% figure is for all women versus all men. It does not factor in occupation and industry or other factors. 77% is absolutely NOT the same industry, same job, same experience. It includes any occupation women work versus any occupation men work across all ages and all amounts of experience and all education levels. If you do compare apples to apples (same job, industry, experience, education) then there is still unequal pay but it is NOT nearly… Read more »

partgypsy
partgypsy
8 years ago
Reply to  Kevin

Kevin – make me gag. I don’t know, I’ve seen too many instances of sexism in the workplace to think its due to those factors. The first place out of college I worked had male managers, with all the subordinate workers females. I did what any advice would give regarding positioning myself and asking for a raise (I learned they were actually diverting money specifically for funding my salary to themselves) but I was a female they laughed if off and told me to take it or leave it. Many years later I also lost a job because my boss… Read more »

Ginger
Ginger
8 years ago
Reply to  Kevin

Even when the data is comparing the same job and same experience level (basically the two things you spoke about) women still make less. Now it is about 80-85% of the man’s dollar but that is still a major gap. And just because you do not believe the peer reviewed statistical data does not make it untrue.

PawPrint
PawPrint
8 years ago
Reply to  Kevin

I would say that teaching our children should be paid a lot more than someone who works on an oil rig.

In my state, a recent survey of people who run state agencies showed that women were paid significantly less than men. It was quite an eye opener.

Kevin
Kevin
8 years ago
Reply to  PawPrint

“I would say that teaching our children should be paid a lot more than someone who works on an oil rig.” Then why doesn’t it? Capitalism sets everyone’s value exactly where it should be. Money talks, and society values roughnecks higher than it values teachers. These salaries aren’t sent down from Mount Olympus in stone tablets, set by some higher being. They’re set by the market. It’s exactly the same as the “risk premium” on equities over treasuries. The reason Greek bonds return a higher yield than US treasuries is because if they didn’t, everyone would just buy US treasuries… Read more »

Kirsten
Kirsten
8 years ago
Reply to  PawPrint

I hope Kevin doesn’t have a daughter.

Sam
Sam
8 years ago

As a woman who out earns her husband, and has during the entire relationship, and who manages the personal finances of our household and much of the investments as well, this post may not be applicable to me but I agree with it. I have many girlfriends who are stay at home moms who have been out of the workforce for years, I worry about them. Divorce is only one worry, major health problem, a disability, an accident, a death, etc. You need to be able to take care of yourself and you need to know how to pick up… Read more »

Nicole
Nicole
8 years ago
Reply to  Sam

It’s a good reason for being insured up the wazoo. Life insurance, disability insurance, umbrella insurance etc.

You can get by with less insurance if both partners are working and you can live on one income.

tbb
tbb
8 years ago
Reply to  Nicole

Insurance doesn’t do you a squat bit of good if the main provider in the family up and decides to leave you for someone else. Job skills and education are some of the best “insurance” you can have!

Panda
Panda
8 years ago
Reply to  Sam

Same situation here, but it’s a situation I’m thankful for. Sure, I might have liked my personal life to have smoothed out a little sooner, but there’s no doubt that the many years on my own post-college gave me a huge incentive to learn my finances, plan for retirement, etc.

Elizabeth
Elizabeth
8 years ago

All good points, and good tips 🙂 One thing women should also be aware of is that even though we live longer, we’re living with more years of health issues and disability. (Look at Health-adjusted Life Expectancy, for example).

Women may live longer but we’re also more likely to be affected by a condition that affects our physical and mental ability to work — like musculoskeletal diseases or dementia. It isn’t just the years of life we have to plan for, but the years of care too.

Nicole
Nicole
8 years ago

Fantastic post!!! Should be mandatory reading.

Joe @ Retire By 40
Joe @ Retire By 40
8 years ago

I see that it’s tough. Everyone has to look out for themselves and plan for the future. Right now I earn more than my wife, but once I quit my corporate career, she’ll be the main bread winner. Many of the same problems will apply to a stay at home dad too. I wonder if SAHD lives longer than the average men. 🙂

Jen from Boston
Jen from Boston
8 years ago

Which is why I forwarded this post to my bf. If we get married, I will be the main breadwinner, and he will most likely be the SAHD if we have children. So flipping the gender in the article, or ignoring it completely, still helps it to apply to us. I do worry about him having his own retirement savings should something happen to me or us (e.g., divorce). Generally, I think this is an excellent article for ANYONE, regardless of gender, to read: Know what your finances actually are, and maximize your retirement funding.

Kaytee
Kaytee
8 years ago

My husband is currently a SAHD, while I am the family CFO and main breadwinner. He hates money and anything having to do with it, so I handle the grunt work and keep him appraised of what is going on (whether he wants to know or not). I’ve also set up accounts that are all his own, because I think he needs to have them, were we to split up, or if something were to happen to me. SAHD’s are much more prevalent than they used to be. Once you are tapped into that world, there are more than you… Read more »

John
John
8 years ago

My wife has a college degree, I do not. My wife is a white collar professional, I am a blue collar union worker. I, however, make about 30% more than my wife. Is this unfair? Is this sexist? On the surface, with no explanation it certainly seems that way but if we examine the issue we may come to a different conclusion. I have been in the workforce my entire adult life. My wife left the work force twice, to raise our two kids. I actively seek advancement, overtime and continuing education. My wife prefers to work the fewest hours… Read more »

Anne
Anne
8 years ago
Reply to  John

I suppose it would be fair to not to pay “the same money” if the “man putting forth twice the effort” were paying for the support he recieves. They’re his kids – so perhaps he should take a job where he can pick them up or stay with them when they’re sick. (Oh, wait, that might hurt his long-term prospects as he wouldn’t be putting in “twice the effort” anymore). He can put in “twice the effort” because someone is backing him up – making sure he has clean clothes, breakfast and dinner, if not packing lunching, caring for his… Read more »

Kristen
Kristen
8 years ago
Reply to  Anne

Anne – if I could ‘like’ your post twelve times, I would do so.

Anne
Anne
8 years ago
Reply to  Kristen

Thanks – working in an engineering profession I’ve been exposed to this far too much.

elysia
elysia
8 years ago
Reply to  Anne

I’d like your post many more times as well. I think my husband is a great guy, helps with the kids, has somewhat flexible job. He out earns me, but as one might say, he has spent more time while I took time off to care for the children. What doesn’t count… I wake up, fold the laundry, empty the dishwasher, help the kids get dressed, make them breakfast, pack their lunch, wipe of the counter, put everything away, put laundry away, run the vacuum, go to work, get the kids off the bus, feed them a snack, empty their… Read more »

Beth
Beth
8 years ago
Reply to  Anne

“..if there’s going to be an economic hit for child raising it’s the responsibility of the party who benefits (usually the man) to mitigate this for the party who takes the economic hit (usually the woman).”

Big thumbs up! Among a few of my friends, it’s the husband whose career has taken the back seat raising kids. I feel it’s up to couples/families to make sure everyone is provided for in the future.

jim
jim
8 years ago
Reply to  Anne

It seems that the ‘Like’ total is limited at 99 and Anne hit the max. Does she win a prize? 😉

I’ll ad a +1 like.

Anne is very correct that women are still generally expected and/or take it upon themselves to do most if not all of the child rearing and household duties in a family.

Could John put in twice the work as his wife does if he was doing half the childcare and household work?

jim
jim
8 years ago
Reply to  jim

Huh, now its at 101 likes. I thought 99 might be the max cause I couldn’t get it to ‘like’ for me. Guess 99 isn’t the max and I assumed wrong.

Sarah
Sarah
8 years ago
Reply to  John

“My wife has a college degree, I do not. My wife is a white collar professional, I am a blue collar union worker. I, however, make about 30% more than my wife.”

As a small aside, you also probably make more than the vast majority of PhD holders who are trying to cure cancer and infectious diseases as postdocs. Pay is not a reflection of effort or even value. My prestigious NIH fellowship qualifies me for low-income housing in the city where I live.

Elaine Colliar
Elaine Colliar
8 years ago

Wowsers!!! I am single and raising two kids – I’m not sure whether your article argues for or against being in a partnership – but the one thing I am gong to take on board is that I am “Master of my Own Ship”

Time for a more robust retirement plan I think

Tom
Tom
8 years ago

“According to the Hartford study, the typical widow sees her income drop 50% when the husband passes away, yet expenses drop just 20%.”

I would guess the 50% drop comes from either 1. annuities/pensions or 2. Loss of earned income.

Do you think as private companies move further away from offering pensions, and more towards defined contribution plans, we’ll see this statistic attenuate a little bit? Your 401k doesn’t disappear when you die.

partgypsy
partgypsy
8 years ago
Reply to  Tom

This may have to do with pensions (though many pensions do have a reduced payout to survivors) but may simply have to do with social security. If the husband was the primary breadwinner and collects x social security, the woman if she didn’t work makes .5X; the couple lives off 1.5x, but if the breadwinner spouse dies is now living on .5 x. I wish I could be optimistic about your assessment, but just looking at who I know (such as people in my family) many people are putting no money towards retirement in any kind of IRA or 401K,… Read more »

Milly
Milly
8 years ago
Reply to  partgypsy

Actually, the survivor gets 1x. That’s what my mother, who never worked, got when my dad died.

partgypsy
partgypsy
8 years ago
Reply to  Milly

Ah, well my parents are divorced so didn’t know about that.

Mom of five
Mom of five
8 years ago
Reply to  Milly

It depends upon how the pension plan is written. Some pensions cease upon the death of the recipient. Others continue in a reduced benefit to the surviving spouse. Pensions are getting so rare that it’s unlikely to matter for most of us, however.

Amanda
Amanda
8 years ago
Reply to  Milly

That doesn’t sound like the right amount. Maybe you’re confused. As far as social security the surviving spouse only gets 1/2 of the “breadwinner’s” benefits.

jim
jim
8 years ago
Reply to  partgypsy

As mom of five pointed out, private defined benefit pensions can have benefits paid out in any way they want to do it. Social security works one way and pensions can work just about anyway they want. So a pension can be setup to give $0 benefit to a surviving spouse or 50% or 66% or 100%. Usually the pension plan gives you a choice of how you want survivor benefits to work.

Bella
Bella
8 years ago
Reply to  Tom

I suspect some of this is also a result of people either having a mortgage still in retirement, or not being willing to downsize their living arrangements once one spouse passes away

Jane
Jane
8 years ago

I think you will be writing this article for many, many years to come. I left the workforce with my husband. He is seven years older and has a pension. I do not have a pension. I never made half what my husband did anyway (even when he retired the first time and joined me in MY field). We were squirrels though. I will never be able to live in NYC or cruise for years- but then we have never wanted to do that to begin with. I don’t think that most people see the ING retirement as a reality.… Read more »

Mike Collins
Mike Collins
8 years ago

My wife is content to let me worry about all the financial stuff and that worries me. I’m trying to get her more interested and involved in the decision making process. While it is nice to know she has faith in me, I worry that if anything were to happen to me she wouldn’t have the slightest idea what to do.

schmei
schmei
8 years ago
Reply to  Mike Collins

Mike, I could say the exact same thing about my husband. I try to make sure he knows where all the important stuff is, “in case I get hit by a truck”, but I do worry what would happen if said truck ever does run me over…

JMK
JMK
7 years ago
Reply to  schmei

I manage the finances in our house and my husband is completely fine with that. Pleased in fact, as tracking the daily details is not his thing. He is also an Excel ninja so should he ever have to take over the spending plan spreadsheet and retirment calculations it would only be inconvenient, not a disaster. Within the spreadsheet document, I have one page called “Breadtruck”. It’s always been our term of reference for any process or instruction document. If I were to be hit by a breadtruck, here’s how to _______. It contains the entire annual budgetting process step… Read more »

CJ Belle
CJ Belle
8 years ago
Reply to  Mike Collins

I feel ya, I too “run” all the finances (and keep hubby in the loop!). I can suggest: make a legacy folder/binder/drawer for her (has all important insurance/title/etc documents, instructions, passwords, and a cover letter introducing her to the contents) in case something happens to you. I am doing this for my husband who also is not so interested in keeping track of our finances and futures, but slowly he’s getting on board (yay!). It took me a few weeks to get it together, and now that I’ve read this article, I have a sudden urge to finish the legacy… Read more »

Mom of five
Mom of five
8 years ago
Reply to  CJ Belle

This is what I have done exactly. My husband is glad I handle the finances. I discuss major decisions with him so he is aware of everything but ultimately he leaves the financial decisions up to me since he trusts that I’ll do the right thing.

I really think so long as I keep him in the loop and have all account info at his fingertips in the event of my incapacity, he’ll be fine.

Becky
Becky
8 years ago
Reply to  Mike Collins

Mike, I feel your pain. My husband is the same way. Because I currently earn more than him, he feels uncomfortable (because he feels he’s not contributing enough) when we talk about finances. As if this is any time to go macho on me!

I have put together spreadsheets and lists of what he needs to do and where everything is if something happens to me. I am wondering if it might be helpful to recruit another family member (my sister-in-law?) to help him understand my papers and get onto his feet in a worst-case-scenario.

Rosa
Rosa
8 years ago
Reply to  Mike Collins

Do your best to push her to at least look at stuff. Part of being a SAHM was taking charge of all the financial work. But at the same time, we were having conflict over money. One afternoon, sitting paying bills, I thought “damn, I could just buy [thing i wanted he thought was a waste of money] and pay for it and he would never notice because he never looks at any of this.” So I started making him do it half the time. We’re back to a more uneven distribution, but I never let him go more than… Read more »

getagrip
getagrip
8 years ago
Reply to  Mike Collins

I sympathize, Mike. While I recognize that this trait isn’t gender specific, my case is much like yours where upon getting married my wife dumped all the bills, all her debt, and the bulk of the future planning to me. Not only that, but trying to get her to sit down and talk about money is like putting a resisting cat into a cat carrier. She’d make excuses, try changing the subject, even offered up romantic interludes as alternatives on occasion. When she would finally agree to sit down I could literally see her eyes glaze over even as I… Read more »

JM
JM
8 years ago

Yes, I would love to be a housewife or eventual SAHM, but I know that if, God forbid, something ever happens to my husband, I will be on my own and have to provide for myself. He has life insurance that will take care of the mortgage, but I will still need to provide for everyday expenses. This is why I am worried about leaving the workforce entirely. I want to make sure my job skills are current and marketable, even if I only work part-time, in case the worst happens.

Nate
Nate
8 years ago
Reply to  JM

JM, I would suggest your husband take out 10x his income in term life insurance. If he is already paying for “enough to cover the mortgage” it would be wise to increase the life insurance to also cover your basic expenses etc. Assuming he doesn’t have any serious medical condition (or anything else on the insurance company’s radar) – 10x income term life insurance is really more affordable than people realize. Seriously. It might be an extra 50 bucks a month for that coverage. Tell your husband tonight, “Hunny could we look into increasing your life insurance before we start… Read more »

chacha1
chacha1
8 years ago
Reply to  Nate

or: enough to PAY OFF the mortgage and cover living expenses for a year.

DH and I each have a term life policy that’s enough to cover full rent and expenses for a year. We’re still fairly young so our priorities are paying off debt, saving, and maximizing our health. Buying more insurance than we have would begin to be cost-ineffective since we don’t have any kids to worry about.

Amanda
Amanda
8 years ago
Reply to  chacha1

I think you should have enough to pay off the debt too.

Also, I know that my DH will throw himself into work to deal with the pain. However, I’d be more likely to collapse and stay in bed for several years if he dies. Therefore, his life insurance pays out more than mine. It’s another way to keep things a little cheaper.

Mom of five
Mom of five
8 years ago
Reply to  JM

I agree with the notion of having lots of insurance if your primary career for a few years will be raising the kids. However, I’m uncomfortable with the notion of planning my finances around the possibility of my husband divorcing me. I was unable to access the NY Times article about the woman who was presented with divorce papers after 40 years of marriage, but that doesn’t stop me from having an opinion about it. 😉 Just an off the cuff observation from the excerpt part: It seems that that lady’s problems were the likely result of financial mismanagement or… Read more »

Becky
Becky
8 years ago
Reply to  Mom of five

Honestly, you *especially* as a stay-at-home mom should figure out how to read this article. I urge you to do so. I agree that it is very uncomfortable to think about making plans about what you would do if your husband divorces you. But so what if it’s uncomfortable? You’re an adult – face the uncomfortable truths in life. Even if divorce is very unlikely, nobody is immune. And the consequences are grave if you have refused to face the question, and it suddenly happens. As it did to the woman in this article. Who had been a public advocate… Read more »

Mom of five
Mom of five
8 years ago
Reply to  Becky

I will try to read the article but I doubt it will change our current financial planning. Although my husband has earned significantly more than I since our first child was born, in the event of a divorce, I likely would be financially better off than he. For various reasons completely unrelated to the state of our marriage, a sizable portion of our assets are held in my name only, the remainder is held jointly. In fact, my husband owns nothing except his vehicle in his name only. If you have read the article, can you tell me why did… Read more »

tbb
tbb
8 years ago
Reply to  Mom of five

I totally agree with Becky. No, you don’t want to live your whole life with that suspicion of “maybe he’ll divorce me,” but there are plenty of other things that can happen. Long-term disability and death are at the top of that list. My aunt was widowed at 40 and left with 7 kids and no jobs skills. Fortunately, my uncle was in finance and let her in very good shape, but as the last of her kids graduates from high school and she has no education or job skills, she’s trying to figure out (at age 55) what to… Read more »

Samantha
Samantha
8 years ago
Reply to  Mom of five

I think you can access it here: http://www.nytimes.com/2006/01/01/fashion/sundaystyles/01LOVE.html?pagewanted=all and if not, Google the part Robert quoted and it will come up.

I read it when it was first linked here, and on the topic of her divorce, I believe he was an alcoholic and was leaving her for another woman, which is probably why he wasn’t more equitable/less contentious with the settlement.

Mom of five
Mom of five
8 years ago
Reply to  Samantha

Thanks for the article link! It really doesn’t answer my questions though. Why did she still have a mortgage after all those years? Was there any retirement money? She surely would have been entitled to a portion of that? There’s not enough information in the article to have a definite answer, but I will speculate that woman fell on difficult times due to poor financial planning, not because she didn’t plan for a divorce. My guess is if you asked her husband how he was set for retirement his answer would be not well. If the point is that both… Read more »

Bella
Bella
8 years ago
Reply to  Mom of five

I read the article and I too am a little confused as to how she got so screwed. Maybe the laws are different in NY. I suspect that since he filed for an ‘at fault’ (she mentions 16 pages of them) divorce that played into it, perhaps he refinanced the house and ‘gave’ the money to the mistress – so he didn’t have it anymore (she was clearly blindsided, I guess he could have been making moves for a while). Maybe they really weren’t as well off financially as she thought they were – and they’re lifestyle had been bought… Read more »

Curtis
Curtis
8 years ago
Reply to  Bella

Maybe be could afford the better lawyer.

Jen from Boston
Jen from Boston
8 years ago
Reply to  Bella

It doesn’t say if she’s still in the home she shared with her, so maybe she has sold it since the divorce? It’s possible she still had to pay the old mortgage, make the repairs, etc. in the year or two after the divorce, when perhaps she was too far in shock to make the decision to sell.

Carla
Carla
8 years ago

Because of a series of decisions I’ve made in the past, and a series of events I could not control I am part of the statistic, not the super, high-powered nouveau femme. This post is a good reminder to keep on top of things financially for the long-term, especially if marriage and partnership is not in the cards for me.

Jamie
Jamie
8 years ago

I earn more than my hubby and I am in charge of all of our finances, and I am not the SLIGHTEST bit annoyed with or offended by this article. We are a young-ish couple (early thirties), and there is a lot of gender role reversal in our relationship– I work in an office while he manages our home and takes care of our ailing parents. I took a lot from this article– To be aware of retirement age and life expectancy differences, and also (since I am in charge of the finances) to make sure he has plenty of… Read more »

Ms Life
Ms Life
8 years ago

This is a very good post. We have had a lot of widows in Zambia in the last 15 years and it is heart-breaking to see families collapse because the widow has no income and does not even know the late husband’s bank account. The situation made me resolve and be determined that I will not let someone else have my financial future in his hands. I make sure I work and will continue doing so even if I were to have children. I have also seen divorcees become homeless because they contributed towards their husbands’ investments but were never… Read more »

Bella
Bella
8 years ago
Reply to  Ms Life

This was my only beef with the millionaire next door – it was a game changer for me. But they kept referring to the millionaires as having SAHM wives who did the companies books. I dunno – I see that as two parts of a successful partnership and they both contributed to and deserve the millionaire monikor.

Beth
Beth
8 years ago
Reply to  Bella

I agree! When my mom was self-employed, she used to joke that she needed a wife — that is, someone to do the cooking, cleaning, shopping, laundry etc. while she focuses on her business.

Often, having a successful career or business is thanks to the contributions of a spouse and family.

chacha1
chacha1
8 years ago
Reply to  Ms Life

DH & I have our own bank accounts, but we have authorized each other to use them.

Haven’t done an estate plan, but at least we got that far!

I’m one of those who handles most of the finances (as well as most of the housework, and yes that does annoy me sometimes). We earn about the same amount each year and essentially live on one income.

I cannot imagine *not* being interested in financial decisions and recordkeeping.

Becky
Becky
8 years ago

To some extent, the fact that this is a gender phenomenon is a generational thing. I think this is valuable advice for everyone. Even if you’re a guy in a “traditional” family, presumably there are women you care about, and thus you need to think about these issues as well.

I have generally out-earned my husband and I am our household money manager. I worry about how he’d manage without me, and try to plan with an eye toward his well-being if I die first or we divorce.

tbb
tbb
8 years ago

I was never one of those “I’m going to stay home and raise babies” people, but there came a point in my life where that is what I did. After having two kids and putting a husband through 5 years of school, I was finally able to stay home with my kids for a while. Then hubby decided he wanted a different life (well, a different woman) after 12 years of marriage and left me with an income of zero and him with an income in the good 6-digit range. Because I had been handling the finances, however, I knew… Read more »

Tara
Tara
8 years ago

The take-away lesson for me is that everyone should be able to provide for themselves. My mom told me never to quit my job, that I could be one husband away from financial disaster if he left me. Good advice.

Holly
Holly
8 years ago
Reply to  Tara

Amen to that. I’m grateful to have witnesses a rare fight between my mostly-happily-married parents where my father stormed out and my SAHM wailed, “What am I going to do?!”. My dad came home after he cooled off, but I vowed never to be in my mother’s position, dependent on someone else.

It has not been easy for my husband and I to juggle two careers and a family, but I know I’ve done everything in my control to ensure a secure retirement for myself.

KP
KP
8 years ago

A couple of factors that have been ignored. FMLA is not just for babies. Major Heart Attack – Considered an illness and a badge of honor, no pay issues. Time for rehab readily accommodated. Birth – considered a handicap. Time to follow-up with child and family issues resented. So there is one difference. Also need to consider that the birth can be planned for and backups trained, not so with heart attack. The other issue about women in male dominated fields. How many wives accept and encourage their husbands to socialize with female coworkers outside of the office. How many… Read more »

Glusha
Glusha
8 years ago

I am a little surprised at the comments here. I read the NYT article referred in this post, and from it it follows that for 40 years of marriage the woman did not concern her with things like mortgage or car payments. Is that her husband’s fault? Also, she seemed to expect that the alimony she received (the money to support a smaller household) would be similar to what she was used to have to run a larger household. Why? One’s spouse is not one’s slave, people change and circumstances change. I do not think my husband owes me a… Read more »

Anne
Anne
8 years ago
Reply to  Glusha

Let’s say you’re a 25-30 year old teacher (nice stereotypical female career) living in an east-coast metro area. You’re probably earning around $40K, and let’s say your spouse is making $50K – not a lot more, but some. You both decide you want kids. Plural. In Massachusetts, infant care in a certified center is $400+/week (about $10/hr), or at least $21K/year. $40K, minus taxes is about $32K, minus childcare for 1 kid is, $11K, minus care for the 2nd kid … Hmm. It seems that staying employed while the kids are in pre-school is going to be more expensive than… Read more »

Glusha
Glusha
8 years ago
Reply to  Anne

Anybody is free to make a decision to risk long-term economic prospects in favor of short-term savings. This is a valid approach – but it absolutely does not make SAHM or SAHD a JOB.

Strictly speaking, kids do not even have to play a role. Both spouses are completely free to decide that one of them, say, does not feel like working, and the other one will support them. Needless to say, they are free to reconsider that decision. As well as decision to stay married, as a matter of fact.

EmilieK
EmilieK
8 years ago
Reply to  Glusha

Glusha are you a parent? As a stay at home mom, I take extreme offense at your comment that being a Stay at home parent is not a job. The hours, the stress, the worrying, they are indeed very real and just as valid as those at a “real” job. Additionally, information has recently been published (I’m sorry I can’t quote the source) saying if a SAHM or SAHD received a salary it would be well over $100,000 for all of the jobs they typically undertake, not to mention the support they provide for their breadwinner “real job” spouse. I… Read more »

Glusha
Glusha
8 years ago
Reply to  Glusha

@EmilieK Yes, I have three children, and I stayed at home for two years with the first, two and a half with the second, and one year with my third boy (I am very thankful to my husband, who had to work three times as hard, and had to take on additional side jobs to provide for our family – I am sure he’d much rather spend more time with me and our angels, but he chose to make that sacrifice for us). Yes, running a family and being a Mommy is a stressful, challenging and frequently hectic affair –… Read more »

EmilieK
EmilieK
8 years ago
Reply to  Glusha

I completely agree you shouldn’t count on your children to support you . That wasn’t the point of my comment. I wasn’t implying support as in direct support – I meant running this country, making economic and financial decisions, running businesses/government etc. that we will all be dependent on in some capacity in our “golden years” I agree, the dynamics are different in a stay at home “job” vs. a “real job” but if it’s not a job, what is it? Is what I’m doing of no value? Am I “wasting” my life? I worked a great job with a… Read more »

Glusha
Glusha
8 years ago
Reply to  Glusha

@EmilieK
No, I disagree. Living your life – breathing, eating, finding a spouse, getting education, working on a relationship, exercising, running a household, raising children – it is ALL not a job. Life is not always peaches and cream, well, tough.
And again – I disagree. Working outside of home, providing for a family is actually more challenging than being a SAHM. Being a SAHM is easier AND frequently more rewarding.

avt
avt
8 years ago

Another suggestion that I wish was on here and would be more impactful for ALL women is…Write, Call, Meet with, Email your legislators about the negative effects of wage discrimination based on sex. Fight for equal pay for equal work, better family leave policies and more flexibility for families who are having kids and working! Get involved.

I wish this post had just said explicitly that all those examples are a function of sexism…this is what institutional sexism looks like folks. Not to mention the impact of race for women of color.

elena
elena
8 years ago

Very timely, post Mother’s day.

Definitely looking forward to more updates on unique issues surrounding women and retirement.

elysia
elysia
8 years ago

Someone must’ve deleted a comment… got it in my email. Anyway the article about being a SAHM’s salary comes from http://www.salary.com/what-s-a-mom-worth-in-2012/ – I’m just pasting the summary here, but read through: “After averaging the salaries of these top 10 mom jobs, we were able to calculate how much moms would earn if they actually received a paycheck for their work, including overtime pay. Stay-at-home moms work a total of 94.7 hours a week, with a 40-hour base and 54.7 hours of overtime on their mom duties. That’s good for an annual salary of $112,962, or $17.80 an hour. But we… Read more »

teri
teri
8 years ago

WOW – SERIOUSLY?????? WOW !!!!! Your generation needs to grow the eff UP! WOW – you guys really, really, REALLY think you’re effin VICTIMS?????? Get the hell over yourselves. RIGHT NOW. You haven’t got a clue – not even a hint of one. GROW UP! And for God’s sake get the hell over yourselves. What a bunch of cry babies you are. WAKE UP! You are living in AMERICA and I, for one, am sick to death of your cry baby antics. And no, I am not a white male, rich guy – on the contrary I am a female,… Read more »

Panda
Panda
8 years ago
Reply to  teri

What on earth is this even in response to?

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