In general, when people get married they don’t think about their pensions.
True but hermitian mentioned not buying big houses or new cars, which implied a more modest income if his savings rate is 15%.
Means testing of social security, even if it does happen, isn’t going to apply to middle class people who saved 15% of their incomes. It’ll apply to those whose retirement incomes are well into the six figures like Medicare means testing. The kinds of people whose annual income in retirement is as large as the entire net worth of middle class retired people.
There are days when I am relieved that my brother in law died young - in his mid-40s. Until that point - and through his illness - we supported him off and on - bailing him out of poor financial decisions and bad job choices. I can remember being irate with him when he decided to go to Europe a year after we’d bailed him out of a mortgage crisis - and he hadn’t paid us back yet. He thought he did, he always thought he did, and would tell my husband he did - but he never got more than a few hundred dollars in payments when he’d stop sending them and I’d write off the rest as marital good will. I’m a think aheader - and I was watching a time when I’d be working at 65 because we needed to support him because he chose to quit a job to focus on music, or get a pilots license with debt because he wanted to fly planes as a hobby.
As it was, after he died I had my own health challenges and semi retired in my late 40s. And fell into owning half a company that pays me pretty darn well for minimal work.
Most of what I see now in my 50s is friends who got a late start, putting off getting a job that would allow them to save, build equity in a house, have their kids while still in their early 30s - basically fuck around chasing dreams for fifteen or twenty years before they start planning for a future. Waiting tables while you work on your acting career or music or art is great when you are in your 20s, but those are also the years that stashing money into the 401k makes a difference in compounding that you won’t see when you are 50. In some cases, that’s been a fairly self aware choice, and they have no regrets, and I respect that. Its the ones that look at where my husband and I are with jealous incomprehension that drive me nuts.
You assume he HAD a pension. Not many jobs do, and if he wasn’t saving in his 401k because they were going to live off her pension, then she’s screwed.
I know a married couple in a similar position, with a few differences. She has a pension, but it’s a small one. He was an entrepreneur who saved diligently and set up a retirement program for himself. The end result is that it’s his savings that are set to make the bulk of their retirement, not her pension.
Now that the last kid is raised and out of the house they have decided to make that split they’ve waited to do for years (they mutually agreed to see the kids through college and get them established as a team). And - whoops! - she discovers that a straightforward divorce is going to leave her a lot worse off than she thought (it’s actually going to hurt both of them, but she didn’t realize how much). Even if the man in the couple leaves her entire pension to her, he’s still going to come out ahead of her if they divorce. From what I gather, the ways things are structured it’s a 70/30 split in favor of the guy. He’s offered her a straight 50/50 just to go their separate ways and settle things quickly. She suddenly realized that, oh shit, if I have 50% of the pile I can’t maintain my current “standard of living” or whatever they’re calling it these days, especially as he’s still employed and adding to the pile (which, if they split, all his retirement and earnings past that point become his and his alone).
Or so I gather - I am not privy to all the details, that’s basically deduced from what I’ve overheard from them.
At this point the guy is in favor of liquidating their mutually held assets and making an even split. She’s trying to find a way to make the numbers turn out better and it’s not going to happen. So now they’re talking about a legal separation instead of a formal divorce.
It’s a mess and I do my best not to get involved.
My sister-in-law is like that- she’s in her fifties and goes on about how she’s so jealous that her siblings are retiring and one already has and she’s never going to be able to retire and will be working at a supermarket until she dies. She probably hates me now, because at some point I told her she had her retirement in her twenties and thirties when she took months off from working as a hairstylist to travel (and don’t ask me why she’s working as a supermarket cashier now rather than as a hairstylist which probably pays better )
I know that I won’t be able to retire at all. I used to be angry about it, but I have made my piece with it, and know I know when its appropriate to die: 64 and 3 months.
I sat down with two financial planners that were looking at my financial portfolio. Yeah its not pretty. I don’t spend any money really, and I eat about half as much as most people do. Both this guy and then his boss promised that they could find plenty of money for us to retire on and fix our budget. They weren’t right and admitted so. They both told us that we were much more financially responsible than most folks that come in their door, just that there isn’t any room in the wages that we make.
My wife and I work at the same place. We haven’t had health insurance since we had to move out of Oregon and left the medicare expansion zone. We don’t qualify for any subsidies, so our insurance would be 1375 a month if we both had it. I kept her on as long as we could when I dropped mine. We won’t be getting insurance anytime soon.
So since we have to take care of her mom that retired while she was living with us, we haven’t been able to save up for the fees to adopt children like we were hoping to do, and in a few months I’ll be 36, which adds points against us and our adoption profile. The fact that we only have two months worth of rent in our savings account and we don’t have employer insurance makes our aggregate score very low, so I have made peace with no kids too, even though I wanted those as well.
So since we are going to have her mom living with us, and probably her dad in the next five years as well (both are broke and have no retirement income except for the 1100 in SS they get together per month), I just need to make enough money to pay for them to live for the next 20 years or so until they pass away.
Our retirement strategy is to buy more life insurance on me. There is a game that we are playing to where we can get more and more life insurance each year as something gets paid off (replace a bill for a broken car or something when its paid off) with a new life insurance policy.
When I get to about 60, I won’t be able to work in the field that I am in as much as I do now, so I will drop down to part time. By 64 my wife will have about ten years left before she can collect SS, if its still there. So I plan on living to about 62-64 and then knocking off, so my wife will have her rent paid and food to eat when she gets to retirement age.
I am okay if I am half way through my life. I’m a debt slave so its cool. I just need my body to ride me another 32 years or so.
Don’t be too sure - around here there’s a glut of hairstylists, and on top of that most of them don’t get insurance from an employer. At my company cashiers get a competitive hourly rate AND health, vision, and dental. Which might be why a number of our cashiers are former hair stylists, too.
Well, I know she doesn’t have any type of insurance, because she has her sister get asthma inhalers for her , so that’s not it
My coworkers run the spectrum from retiring next year to asking why would they voluntarily give away 5% of their gross income to some fund manager who is probably going to skip out with the money when they could more effectively waste it themselves on beer and skittles. The retiring folks are all over the place financially.
I’m 15 years away from eligibility, and 20 years from “maximum SS benefit”. I will probably work until 70 (or whatever age they boost it to in the interim) for the max benefit. I will be fine, I think, when I retire, but I don’t know that I will ever fully “retire”. If I did, I would probably die in short order from terminal boredom complicated by acute late age adult onset laziness. Also, I don’t really have a lot of faith in Social Security and only a little more in my various retirement investments. OTOH, I foresee a possiblity to make a little money here and there doing something that interests me, and might actually be fun, but at my own pace and distance. It probably wouldn’t bother me a lot to be a Walmart Greeter to make ends meet if I had too.
Perhaps my post was unclear. She kept half her pension. Half went to her ex. This was totally fair, equitable and legally correct. However, she felt it was unfair. His decision (or ability) to remarry, allowed him to retire. Her singleness prevented her financially. She was (perhaps unreasonably) very bitter. I’m not justifying it - just trying to answer the op.
A friend of mine makes fairly high income (around $100,000 per year, CAD) and his wife used to make about half that… but she lost her job and has been looking for one for a year. (Seriously looking.)
They’re moving to a new place this month, probably because they can’t afford the old one anymore. The husband is going to have to drive much farther to work.
We were talking about retirement, and when I asked if he would have paid off his mortgage by the time he retired, he said it depended on his wife’s job situation. They’re about ten years away from retirement, and the longer she’s out of the workforce, the harder it will be to find a job. The longer he works there the higher his pension will be, too… so if his wife continues to be unlucky with job-hunting, he’ll have to work until he can get the maximum pension (and hopefully pay off their mortgage by that point).
Thing about hair styling (this is all IMO) is you hit a income wall at around 30 where even if you worked up to being a shop manager, your going to make about as much as you will ever make. The job can only pay so much.
Now contrast that with working for a large supermarket chain or even Walmart is you have access to health insurance, retirement, and a chance to move up in the company.
Finally I know several people who used to be barbers or stylists that have a chair in their house and see a few clients on the side.
$30K might be true if you work at Supercuts type places - but my sister-in-law worked for Broadway and movie productions ( which pay much better) and was part-owner of a Manhattan salon. Remember, she was earning enough in her 20s and 30s to take months off to travel.
I was saying “30” in age. Around age 30 is where they hit that wall.
Your right she sounded crazy to let a sweet deal like that go especially if she was working for a major movie studio.
Yeah, seems like the right answer for her is “Suck it up, and get a job.”
Yeah, divorce is rarely a good thing for anyone’s budget. At the very minimum, you’re now funding two residences vs one.
My brother and his wife split up after 25 years together. She wasn’t terribly thrifty - had never HAD to be, as she grew up in a well to do family and had generally earned a very good income - so when she was jobless for a bit she blew through a fair bit of their ready cash. She spent quite a bit of time trying to get more money out of the split. At one point my brother took a lower-paying job - partly to be available for the kids who were all special-needs - and she actually looked into whether she could get a court order to force him to look for a more lucrative job, because that meant more child support.
In the situation you describe, I would think a legal separation would be sufficient for his future earnings to be all his, versus split between the two. He’d be foolish to go for that.
Depending on their ages, they might be able to do the trick of the lower-earning spouse claiming spousal social security and delaying his/her own SS until age 70. My brother is actually doing just that - he can claim half of his ex’s SS (doesn’t impact her at all). If he were 5 months younger he couldn’t do that.
Oh, and siblings in the same family: my husband is the oldest of 3. His parents of course I’ve mentioned already.
BIL and his wife got into a mess (reduced income / nonreduced spending) and declared bankruptcy, but managed to hang onto their house and are finally getting out of debt. I get the impression that they don’t really have any other savings - or not much - but they are doing serious planning including potentially moving to another part of the country which is much cheaper.
SIL and her husband also went through bankruptcy; in their case it was due to unrelenting medical bills. She managed to hang onto the house after he died, but has alternated between significant periods of unemployment and periods of being very well paid (what she does is sort of a niche, and it can take a while to find a new job). As of a few years ago. she flat out said that her only retirement savings was in the house’s equity. Hopefully she’s being diligent about it now - but she’s in her late 50s, so there’s not a lot of time to catch up.
So of the 3 siblings in the family, we’re the only ones who have made a habit of saving every single penny we could. We’ve had good luck as well, I admit: no major health hits, and no significant breaks in employment. But we also have a healthy dose of reality as to when we can afford to retire.
My husband will tell you I’ll never divorce him - its financially unfeasible. Far better to knock him off :).
My wife is younger so I’ll be working until I’m 69. She is in a career that doesn’t have many perks, especially insurance so I’ll need to carry it for her. One day at work she’ll go from being an employee to a resident. Other than insurance. financially I’d be able to hang it up early mid 60’s supplemented by her check.