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In Retirement, two can live as cheaply as... Three?
Old 04-30-2007, 10:55 AM   #1
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In Retirement, two can live as cheaply as... Three?

In the April 29th Scott Burn's newspaper article "Myths and Realities of Retirement" there is a nice bar chart derived from SSA 2004 data of income of Retirees over 55. Since SSA benefits do not decrease with age, I have to assume that "income" is SSA bennys plus other interest, investment gains, etc., and that people liquidate those investments as needed to meet expenses.

What I wanted to point out is that the Median household income of Couples vs. Singles yields an unusual multiplier when I divided them out!

The following is in the format:
Age Range_Dollars_Couples$ divided by Singles$

Couples
55-61_$68,612_2.86
62-64_$54,899_2.88
65-69_$44,299_2.8
70-74_$36,750_2.58
75-79_$30,413_2.18
80+__$28,490_2.14

Singles
55-61_$24,000
62-64_$19,032
65-69_$15,799
70-74_$14,263
75-79_$13,929
80+__$13,321

No one expects two to live as cheaply as one... maybe twice as much? But this is approaching three times as much!

Now before someone can't wait to point out that Nords has already posted about this article, I'm addressing the part I found interesting, that was NOT talked about, so there!

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Re: In Retirement, two can live as cheaply as... Three?
Old 04-30-2007, 11:23 AM   #2
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Re: In Retirement, two can live as cheaply as... Three?

I was taken aback by that fact too at first.

Then I realized that he was simply reporting the actual numbers. Meaning that the singles requires less money to live on NOT BY CHOICE.

This kind of reinforces what a lot of people here advice: If you're married, stay married. Divorce is financially devastating for both parties.

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Re: In Retirement, two can live as cheaply as... Three?
Old 04-30-2007, 01:37 PM   #3
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Re: In Retirement, two can live as cheaply as... Three?

Quote:
Originally Posted by Sam
I was taken aback by that fact too at first.

Then I realized that he was simply reporting the actual numbers. Meaning that the singles requires less money to live on NOT BY CHOICE.

This kind of reinforces what a lot of people here advice: If you're married, stay married. Divorce is financially devastating for both parties.
This is a big factor. There is also the fact that marriage as well as marriage persistence is correlated with income and social class. Obviously there are many well to do bachelors and single women, but the overall picture is that men and women with more resources are more likely to be married. Ditto for remarriage. Who is more likely to get remarried- a 50 year old guy making $25,000 a year, or a 50 year old guy making $95,000?

There is also a likelihood that at least some of these singles are widows/widowers, and have lost some net worth/income to medical bills.

Ha
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Re: In Retirement, two can live as cheaply as... Three?
Old 04-30-2007, 02:14 PM   #4
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Re: In Retirement, two can live as cheaply as... Three?

Quote:
Originally Posted by HaHa
Ditto for remarriage. Who is more likely to get remarried- a 50 year old guy making $25,000 a year, or a 50 year old guy making $95,000?
The 50 yo guy making 25K living in Thailand, Estonia, Dominican Republic, etc... is more likely to get remarried than the 95K guy in the USA Different quality too, I presume
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Re: In Retirement, two can live as cheaply as... Three?
Old 05-01-2007, 01:39 AM   #5
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Re: In Retirement, two can live as cheaply as... Three?

Many older singles are widows. When a husband dies his pensions often do to. Most women have smaller SS checks and smaller penions than husbands.
My mom was a housewife until she was 40 then worked for the post office 20 years, Dad was a pipefitter in the union. She got her little pension but double dipping meant no SS for her until dad died then she got as much as she needed to get up to what she would have if she had never worked so about $300 SS and 750 a month Pension. Dad had two pensions and SS, dad left her some of one of his and she has money in the bank but if she had died first he would have had much more income than she gets.
My brother is the same way, retiring this August worked since he was 18 an will be 58, he will have 3 pensions and SS. His wife raised children the first 15 years of marriage so has only worked 25 years. They decided she will get one of his pensions if he dies first. Her income will probably be not much more than half of his and she can't retire for a few more years after he does.
Older women sometimes didn't work at all, mom's sister has been married 62 years and I don't recall her ever having a job, she raised 4 kids one is handicapped. If she out lives her husband her SS will be tiny, he has pensions and his SS but she doesn't.
In the future once people have less pensions it might even out the surviving spouse will have all the joint assets unless they spent down to pay for nursing care for the first spouse.
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Re: In Retirement, two can live as cheaply as... Three?
Old 05-01-2007, 03:32 AM   #6
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Re: In Retirement, two can live as cheaply as... Three?

It is a little odd. I agree, for older people it could be that only one spose worked and therefore fewer assets were acrued to augment SS. Plus when one spouse dies, the pension to the survivor is often cut.

For younger people, I believe in many cases both spouses work and acrue more... plus have more disposable income than a single person. Obviously, divorce creates more single income households. Plus there is an increasing number of folks that have not married or married late.
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Re: In Retirement, two can live as cheaply as... Three?
Old 05-01-2007, 07:37 AM   #7
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Re: In Retirement, two can live as cheaply as... Three?

I would wager that some older singles are not living alone, but they ain't married either.
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Re: In Retirement, two can live as cheaply as... Three?
Old 05-01-2007, 08:03 AM   #8
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Re: In Retirement, two can live as cheaply as... Three?

Quote:
Originally Posted by old woman

Older women sometimes didn't work at all, mom's sister has been married 62 years and I don't recall her ever having a job, she raised 4 kids one is handicapped. If she out lives her husband her SS will be tiny, he has pensions and his SS but she doesn't.
Actually, the survivor of a married couple gets the larger of the two SS payments. So if your Aunt is the survivor, she will get her husband's amount and give up the smaller amount she had previously been getting.

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