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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