Why It’s Time to Look at Men’s and Women’s Retirement Finances Separately

Much of retirement planning is predicated on household wealth — which, in the United States and especially among members of the Greatest Generation and baby-boom cohorts, has traditionally meant money controlled by married couples. But a new study suggests that long-term changes in behavior, even among boomers, could signal that it’s time to separate the discussion into men and women.

Women born in the late 1950s have spent a significantly smaller percentage of their lives as part of a married couple than their older counterparts, a new study from the Center for Retirement Research at Boston College found, leading to challenges for retirement planners.

The Boston College team — which included center director Alicia Munnell, research economist Geoffrey Sanzenbacher, and research associate Sara Ellen King — used data from the Health and Retirement Study, a long-running survey that takes the pulse of Americans over aged 50 every two years.


They sought to determine the percentage of adult life, defined as ages 20 and older, that women of different age groups spent in a marriage, focusing on four sets: the original group surveyed in the HRS, born between 1931 and 1941; the “War Babies” with birthdays between 1942 and 1947; the “Early Boomers,” born between 1948 and 1953; and the “Mid Boomers,” born 1954 to 1959.

The generational differences the team found were striking. Women born between 1931 and 1941 had spent 72% of their lives married, tracking from age 20 to the time they were last interviewed. That’s almost 20 full percentage points higher than the “Mid Boomers” at 54%, and the researchers note that the relatively young age of the latter group could end up underestimating the long-term patterns — primarily because most women in those groups haven’t yet experienced widowhood.

“It may well be that, once the whole lifespan of Mid Boomers has elapsed, women in that cohort will have spent half of their adult years married,” the researchers wrote.

Three primary factors played into this significant shift, according to the researchers: Those youngest women got married an average of three years later than their older counterparts, while a greater proportion went through a divorce or never married at all. For instance, the original group had a divorce rate of 33.9%, while slightly more than half of Early Boomers and 49.3% of Mid Boomers had experienced a marriage breakup at some point in their lives.

These trends could have a substantial impact on the retirement planning community, as experts will need to adjust their assumptions and projections to adapt to the greater number of women and men living into their golden years without a partner. Women already account for a disproportionately large amount of the retired population due to longer lifespans, yet find themselves at a disadvantage due to fewer years in the workforce — leading to lower Social Security income.

“The bottom line is that women, as a group, are going to spend less than half of their adult years as part of a couple,” the researchers concluded. “It shows up across race and educational attainment. This change has significant implications for financial planning.”

Read the full report at BC’s Center for Retirement Research.

Written by Alex Spanko

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  • The article Alex wrote is a very good one and should make us all think, not only about our clients specific situation but our own as well!

    I had a couple about a month ago that both were born between that 1942 and 1947 age bracket. Both are married and have been for over 50 years. This couple is one of those rare ones these days.

    The point I am getting to is that at this point in their marriage, the husband is still working but the wife is retired. They are doing fine with his income, both of their social security checks coming in and their IRA’s. The husband also has a VA disability check coming in, based on a 50% disability rating.

    If the husband passes away, the wife now faces losing the income from the husband being able to work, she loses the VA disability income coming in monthly and she also loses a social security check each month! The wife will only get the greater of, either the late husbands social security amount or hers.

    In this case the wife faces a greater hardship situation than the husband would if the wife passed away first. When a loan officer meets with this couple, he or she needs to take all of this into consideration and look at their entire financial situation and come up with a plan that will meet more the need of the wife than the husband!

    Naturally, health conditions come into play but I think everyone can see where I am coming from in this scenario! What would you do?

    John A. Smaldone

    • John,

      It is excellent that you bring up potential separate planning needs for a couple,even if married for fifty years or more at the time of getting a HECM. Providing the prospect with several options for the use of HECM proceeds is well within the scope of what is considered good HECM practice. However, trouble starts when a mortgage loan officer specifies which of the scenarios is best for a particular prospect.

      When the mortgage originator begins providing an opinion of what course of action is best, such advice is practicing outside the scope of normal mortgage originating and infringes upon the practice of those providing such advice under a legal duty of providing such advice under a fiduciary standard. E & O insurance does not provide the prospect with any compensation for relying on the opinion of a mortgage originator while that is exactly what professional liability insurance does for clients of CFPs, CPAs, and even at times, attorneys where there has been malpractice.

      The fiduciary standard is not that the same fiduciary standard as the DOL fiduciary standard which was recently instituted by the DOL. The DOL standard is very narrow while the fiduciary standard of a professional is much broader.

      There is resentment arising in the planning community over HECM mortgage originators who provide their opinion on planning matters and rightfully, so. Certainly there is nothing wrong with providing a financial planning referral source which option the mortgage originator believes is best but that is not true with providing that same conclusion to the client of the planner without the permission and instruction of the planner.

      Here we must distinguish between a professional financial planner and a financial adviser. The financial adviser may have credentials such as a CSA, an EA, or similar designation. The adviser may even have a MBA or similar graduate degree emphasizing personal finance but that is not the same as having a legal responsibility to provide an opinion at the level of a fiduciary standard.

      Normally the financial planner has a written agreement with the client stating what steps and various products the planner will analyze based on restrictions placed on the planner by his client. Normally the planner only provides an opinion under a separate fee agreement and generally not as part of an assets under management type agreement or “included in” some type of commission.

      So again providing a prospect with several optional uses of HECM proceeds in light of their facts and circumstances is being a good originator. Recommending one as the best course of action crosses the line into financial planning. As a hypothetical matter, one can argue that there is nothing wrong at looking at several options and even opining on which is best as long as such opinion is not being provided to the prospect by the mortgage originator (or anyone reasonably related to such originator).

      I apologize if the foregoing seems unnecessary but I am hearing of growing resentment for HECM originators who are opining on preferred planning options rather than working with the financial planner of the prospect just because the originator seems to view the planner as a deal killer. Such a reputation could harm the goodwill that so many in the industry are diligently trying to create with organizations such as the FPA and the AICPA.

    • John,

      While your example brings out a reason for the need for each spouse in a marriage to obtain separate along with joint planning advice, you provide insufficient 1) data or 2) hypothetical data from which to create a strong plan even with a HECM. For example, you do not provide the value of the home and any existing liens against it or the relevant expected interest rate. There may not be any proceeds available for making any substantial difference to the borrower after paying off all of the existing liens.

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