Working Wives & Retirement

[Jarhead*]

In a discussion about net worth and the ability to retire early I believe that if you continue to have a working spouse you have not truly reached early retirement .
It brings to mind one of the guys that I worked with married an anesthesiologist, and "retired" at age 40.
His advice on an early retirement board would probably be marry an anesthesiologist
My wife never worked (received income) out of household. It was our choice to have her stay home with the kids, and would not change anything about our arrangement.
However, when I first started browsing on this board I was amazed to hear how many others had also retired early, and the elaborate trips and lifestyles they continued to have. After spending some time I found that many continued to have working spouses.
While I don't begrudge that at all, I have seen advice being given from the individuals to new posters, that are looking for advice, to go for it. "I retired on less than that" type of advice.
If your wife or husband continues to work, you have the advantage(usually) of low cost health ins. cash flow, etc. etc.
I still continue to get some good information from most of the posters on this board, but some of them have to be taken with a grain of salt.
Jarhead

 

[Cut-Throat]

Jarhead,

Good Point and I agree with you!

I have always maintained that there are 2 components to retirement - Financial and Emotional. I have retired on the Emotional level only, because my wife still works.

I have also always said; that how much money you need is a very personal matter and my wife and I have not met that number yet, and that is why she is still working. I would not tell someone to retire on the financial level unless they made a comment like 'I have 2 million and need 50K a year for 35 years'.

If someone came to this forum and said that they had enough finances to retire but could not get over the 'emotional' component - I would advise them to do it. - I have done that and don't regret it in the least. I would tell them to go for it.

I would never tell anyone to try and retire on half of what I have now. I am not telling myself that either!

 

[Telly]

Jarhead,

I agree with you there. There is something to be said for relying on your own resources, with no more wages coming in. A certain finality of it all. That you have to succeed. That wages won't be there to cover. We were there until the last part of 2003.

My wife quit working when our first was born. She was a stay at home Mom from then on. A few years ago she started working a day here, a day there, <20 days a year total, low pay no benefits.

Last year she decided to take on a position, and work most of the year, and probably for the next 4 years or so. It is a low-paying job. It gives her basic medical insurance (for her alone). We are figuring that her per-year wages, minus taxes, ins. premium, and the costs of working, will roughly equal most of the per-year college costs of the last child heading to college. So the cost of college that was figured into our income requirements for the next 4 years will be lightened, if not removed.

In a way, this accomplishes what I originally planned to do, to retire when I reached 55, when the youngest would be out of college. As mentioned elsewhere, my retirement came suddenly, years before I had figured to take it. Earlier than I thought even possible.

The decision (hers) to go back to work was made when the market was still down. It also fills a need for her to be organizing and doing something rewarding, now that the kids have moved/are moving on. I hope she can make the transition to no job when the time comes in 4 years or so. That is one long term worry I always had about retirement. That I would do just fine, but my wife would drift.

Anyway, I still think of myself as retired, as all of our daily living costs are being covered by the retirement portfolio.

 

[Hiss]

"In a discussion about net worth and the ability to retire early I believe that if you continue to have a working spouse you have not truly reached early retirement "

My wife and I have a plan so I may retire in 3 1/2 years. My wife has been out of the work force for many years and is happy to be back. She wants to stay until she reaches "normal retirement age". I am lucky in that she totally supports my decision to retire early (at 48). Perhaps I will not be truly in early retirement, but when I get up each morning and remember I don't have to go to work it sure will feel like it to me.

I realize that was not your point, however, and I agree with you. I would not feel in a position to give advice to others financially unless it were a clear cut answer to a question as cut-throat indicates.

BTW, as a new member I don't know how to do some of the posting tricks, like highlight someone else's comment to respond. Can someone advise?

 

[Bob_Smith]

I'm not too hung up on an official definition of ER. It's all about reducing and eventually eliminating the need to work for pay. We're all at different stages and have different circumstances. We're all doing what works best for us. As far as I'm concerned, if a man has a wife who is younger, or a wife who truly wants to get out of the house and do something, I think he is officially ER'd if they've worked out a way to do it where both are satisfied.

I'm still working FT, but my wife has told me that when I quit, she plans to continue working part time. Why? She enjoys the activity and the interaction and she becomes restless if she doesn't have that. When we were first married I insisted she not work because that was the macho thing to do in those days (1974 - 80). She hated it! So she started working part-time and has done that since about 1980. I think we could make it without her working at all, but her wanting to work part-time will add a margin of safety that will be nice. But the bottom line is that she wants to do it anyway, so why not?

I'm not nearly as macho as I used to be. All in all I think women have more stamina than men, and my stamina for work has just about expired. My wife's hasn't. I say power to her! If it works for both, why not go for it.

 

[haha]

I'm not too hung up on an official definition of ER.

I don't think that is what Jarhead had in mind. I believe what he was saying is that advice from someone who has wages coming into his household, and whose wife may be supplying benefits is a little different from hearing from someone that actually has cut the cord, or had it cut for him.

Most of us agree that it is fun to sleep in, go fishing, have no boss, etc.  It is the details of financing that situation that we worry about.

For the record, although my wife now works, she has no paid benefits, she doesn't makes much money in her job, and she doesn't live with me. (Probably good judgment on her part.)

As to my expenses, they are covered solely by my investment earnings.

Mikey

 

[John Galt]

Hello Mikey! I have a very good friend who spends
little time under the same roof with his wife. He says
that this arrangement "saved his marriage". I don't really get it, but different strokes, right??

John Galt

 

[Bob_Smith]

I believe what he was saying is that advice from someone who has wages coming into his household, and whose wife may be supplying benefits is a little different from hearing from someone that actually has cut the cord, or had it cut for him.

No disagreement there. I'm just saying that allowing for, or even planning for some earned income, whether from one or both, can be a legitimate way to improve a couple's life dramatically if it means the difference between one or both leaving a dreaded FT job in one-two years instead of five-ten years. Early retirement for some may be working 10 hours instead of 80. It's not up to me to define what is truly early retirement for someone else. There are many variations and I think I can learn something from all of them. On the other hand, I agree with Jarhead about the "grain of salt".  One must understand the numbers and not rely on others' situations without knowing the whole story.

 

[dmcummins]

Well I have been lurking for a while and have been planning my ER for a while. At first I was planning on retiring at 59, then 55, and now 48. The change is because my wife wants to continue to work. She started out as a teacher and is now a principal. She was still in college when we married and now has two masters degrees and close to her doctorate. While she had summers off I was working 60- 80 hrs a week. I'm burned out but she enjoys working.
Because of this she wants to continue to work and financialy I'll be able to quit in a year and a half. If we waited until we could both go we would be looking at 6 more years.
I do plan on taking care of things around the house to make her life a little easier.
This is her decision as much as mine.

 

[Jarhead*]

Mikey:

Thank you for understanding my point.

Jarhead

 

[unclemick]

Jarhead

Very good point - other income has big influence on portfolio strategy. I wouldn't vountneer to put our 1993 - 2003 ER) on a spreadsheet. (16 wks severance plus unemployment, she worked 1 yr longer., rental income plus later cap gain on sale, mother's SS, I worked 1 yr jobshopping, pension cut in at age 55). Never did the 72t on our IRA rollover, I just 'knew' was necessary at the end of 1992.

Also had a tornado remove the roof in 1995 (lived with the neighbors for 6 wks) and she got 15 yrs of back remodeling 'requests' plus new furnishings, kitchen, and appliances(temp job money). Hurricane damage in 98, and 02 resulted in 'opportunities to upgrade'.

And I'm sure I've missed some things. There is life and there plans- I always have advice on plans - but they are that - just plans.

 

[moguls]

I guess I have mixed emotions on this one.

While I agree that with one spouce still working the "family unit" is not ER'd, but the one who ER'd still had to overcome the emotional issues associated with pulling the plug and retiring.

In my case my wife hadn't worked (outside the home) for many years, so my planning for ER certainly could not take into consideration any potential income or benefits from her. Had she been working, and wanted to continue that may have influenced my decision. Maybe I would have ER'd earlier.

Nonetheless, I find the insite and information provided on this board extremely valuable.

Moguls
(60+ days into ER and loving every minute of it)

 

[yakers]

A really good topic as it explores what retirement actually means to different individuals as well as what it means literally. I become retirement eligible in 22 months (but who's counting?) and I don't care if I retire or not as I am doing what I want to do. I can honestly say that if I were retired I would have wanted to come into work for free the last few weeks. (Not like in "About Schmidt" because I have nothing to do but because I like what I do.) But I remember some time back that I had 4 years where I worked for a jerk. If I could have left then I would have. So I regard becoming retirement eligible as "jerk proofing" my life. Whether I retire is not the issue for me but to do as I want. My wife & I got more interested in retirement when we found something we want to do "after working" which is some Habitat for Humanity type work. I suspect that will require more effort than my current job but we would be considered "retired".

 

[bongo2]

My wife retired at age 29 with a withdrawal rate of over 50%. How did she do it? She packs me off to work every day!

 

[John Galt]

This is another area of ER which has unfolded in
unforseen ways. I was completely retired when I met
my wife in 2001. I kind of had it in my mind that we
would concentrate on getting her ERed asap
(she is 5 years younger). However, now we have kind
of drifted into a situation where she likes her employer
and gets some positive emotional feedback from the work
(eldercare). She also likes to have her own source of income, although I figured eventually we would just be
living on my money. Obviously her paycheck is a big help and I really don't mind being a househusband.
Well, got to do the dishes and mop the floor.
More leter...........

John Galt

 

[Martha]

I have been the working wife who is now thinking of retiring. I note that it has been mostly the men who are posting to this issue so I thought I would add my two cents worth. The upside of my husband's early retirement is that he does all the cooking and otherwise takes care of me so I can work hard. By I want to stop. I am 49.

We continue to be nervous about health insurance. We know we can buy through a risk pool (we have chronic conditions) at about 800 per month. We live frugally in a rental property we own free and clear. Our net worth, according to online planners and one financial advisor should be enough to get us 65,000 to 85,000 per year plus 3% inflation for "plenty" of years. We really can live on $55,000 comfortably. However, I can't get over the worry that health insurance will suddenly become unavailable or unafordable. I worry that inflation for the types of things we need as we get older is higher than people think. We will need services, not stuff. We have plenty of stuff. I think the cost of services will go up and up. Any thoughts anyone?

 

[Brat]

Health insurance would be my worry to..

There are some states that have community based health insurance rates- someone once mentioned California.

 

[cute fuzzy bunny]

Yes, I dont see anything here in CA that indexes rates based on care, just on age. A good HMO here charges 180-250 for ages 35-48 or so, I was paying $218 at 42 for full care with some small co-pays. BC/BS of california charges $80-140 for coverage, lower end has high deductables and no prescription drug, the higher cost is still a high deductable but has prescription drug.

Cost for HMO medicare supplement is about $80 a month for the same full HMO coverage.

One thing the insurers are particular on is when you apply, they pull your prior medical history and as far as I can see, if you ever had any test or procedure done, they try to deny you. I had a benign skin tumor about the size of my little fingernail removed in 2000 and a blood test that showed minor irregularities that a retest showed was a testing error and BC tried to deny me. HIPPA forces them to take you anyway if you've had continuous coverage but they'll try declining you and see if they can get away with it.

 

[John Galt]

A couple of "quickies" inspired by past posters.

For those who opine that if you are ERed with a working spouse, "you ain't really done it", I did it for years before
I remarried, so I guess I am officially ERed no matter
which way you slice it. Also, my experience on being denied health insurance is similar to TH. That is, my being
older and having some (non-terminal) "issues", the list
of all my medical procedures, visits, tests, etc etc is quite
lengthy. Thus, it was very difficult for me to find coverage unless I could get it through my wife's
employer. It all worked out okay for us eventually
but it took a lot of work and creative thinking to get there. I recall one company offered me coverage
with a list of stuff they wished to exclude. One of the items was any injury resulting from riding a motorcycle.
Obviously I couldn't use them, although I fully
understand why they wanted to exclude it.

John Galt

 

[arrete]

For those who opine that if you are ERed with a working spouse, "you ain't really done it",

This always frosts my gourd. When I retired, I did it knowing that if my husband and all his assets disappeared, I could still make it on my own without going back to work. That's what the FI in FIRE is all about.

Why should I be considered a semi-leech just because he still wants to work? He's FI also (separately from me) so it's a matter of choice.

Anyway - grrrr.

arrete

 

[retire@40]

When I retired, I did it knowing that if my husband and all his assets disappeared, I could still make it on my own without going back to work.  That's what the FI in FIRE is all about.

Why should I be considered a semi-leech just because he still wants to work?  He's FI also (separately from me) so it's a matter of choice.

I guess you are ERd if you can make it on your own without your spouse. A working spouse may just give you more income or less expenses since you are sharing certain fixed costs, so working spouses serve as an increased comfort layer from a financial point of view.

The problem would be if you could ER on your own or ER with a working spouse, but could not ER with a non-working spouse since you not only have to support yourself, but also need to support your spouse. Some spouses may say, "Why should I go to work while you're doing whatever you want all day?" Although many here have spouses that have not realized the true concept of ER as the ERd spouse has, and prefer going to work than being ERd.

 

[grumpy]

Some spouses may say, "Why should I go to work while you're doing whatever you want all day?"

That's one reason why I worked part time for 2.5 years after retiring from the civil service (my wife wasn't eligible to retire until then).

Grumpy

 

[haha]

That's one reason why I worked part time for 2.5 years after retiring from the civil service (my wife wasn't eligible to retire until then).    

Prudent choice. The divorce court is today's "Great Equalizer", just as the Colt Peacemaker was to men of the old west.

Miukey

 

[JDARNELL]

Some spouses may say, "Why should I go to work while you're doing whatever you want all day?"  Although many here have spouses that have not realized the true concept of ER as the ERd spouse has, and prefer going to work than being ERd.

This is a discussion my wife and I had the other day. With just over 5 yrs left til I retire from the Air Force I was showing her spreadsheets of what the income would be today if I retired. Disposable income actually goes way up. She seemed pleased but I could tell she wasn't really into it. I asked her what she was thinking and she told me that she knew we were going to be fine because I was the planner and wouldn't mess us up. Although she can do the analysis and long term planning she knows that I really enjoy it. She would rather focus on taking things as they come. I need to learn this. Anyway

I then followed up with the question what are your concerns about me retiring? The answer was that you will be home all day.

I immediately followed up with my concerns:

1. Resentment that I am retired.
2. Jealousy of me traveling some.

On item 1 she immediately started laughing and said no worries and she would still have her life be volunteering and selling real estate until she got bored with it then she would join me. Just for me to still give her room.

As for item 2 the response was well you can't be gone 10 months a year. I countered with what about 9 months as she was also finishing my sentence. We had a good laugh and really discussed what I was thinking. Some solo trips and some with her and the kids. Once they are on school breaks of course.

All in all I think it is going to be ok. Looks like I will have one that wants to work for a while. That is ok with me

 

[Nords]

Working whether it's necessary or not.

... she knew we were going to be fine because I was the planner and wouldn't mess us up.

I married one of those too. If she's seen some of my mistakes-- the ones that I've caught, anyway-- she wouldn't be so confident. I think what they're really saying is "I know you can go back to work until you get it right."

I then followed up with the question what are your concerns about me retiring?  The answer was that you will be home all day.

Yeah, and she's fantasizing that you're going to spend it cleaning the kitchen, too, right? Or are you going to quit golfing when you hang up your uniform?!? Most days I spend more waking hours out of the house than in it. I'm starting to believe that a couple two-hour surf sessions a week is not enough.

It's possible that some spouses have found a career that they love. They're not thinking of ER because they don't feel like they're working. And even if that's not the case, I still think that it's important that a spouse work until (1) they're confident that they can support themselves if they have to and/or (2) that they have enough to support themselves if they're not working.

Frankly I think my spouse is still learning to turn it off. There are still a lot of those "I'm not looking for a job, but..." moments. Thankfully they're starting to come less frequently.