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Old 01-07-2010, 09:06 PM
 
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What often doesn't get discussed in the impact that two income families have on their retirement prospects. Obviously two pensions, two social securities and two 401/403 are the ideal retirement package. However we know from many discussions that a number of couples only have one and perhaps the worse condition is the divorced stay at home spouse who is entering the golden years single. A thought is that our parents generation had pensions, stable marriages and a working mom was not considered a drain on the family retirement plans. However today as pensions disappear does this concept require a new look? Do young couples factor in the retirement trade off when they decide if one spouse should stay home with the children? Should that be a factor in the discussion at all. Even if there is no pension two SS and two tax shelters along with the increased income makes savings that much easier. How many financially ready retiree's are that way because both spouses worked? How many not ready for retirement are that way because one didn't work or stopped during their career?
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Old 01-08-2010, 05:26 AM
 
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This issue does not just affect retirement but also affects the standard of living throughout the marriage. If both individuals work, there is a lot more money - even with some higher expenses and taxes. In addition raising kids is expensive, so raising kids on a single income can be tough. There is a reason the single income family was able to get by in past generations. First, the costs and standards of living were lower. Even more important the wager earner worked until close to the end of the life expectancy.

Two people with pensions can afford more than two people living off a single pension. What is the mystery?
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Old 01-08-2010, 05:45 AM
 
Location: Central Maine
4,687 posts, read 5,537,116 times
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Quote:
Originally Posted by jrkliny View Post
Two people with pensions can afford more than two people living off a single pension. What is the mystery?
That's us - both federal retirees, me with 35 years and my wife with 30. Neither of us have anywhere close to enough time paying into Social Security to be eligible for benefits, but we both have money in the Thrift Savings Plan, we both have very good CSRS pensions, and we are both covered by the type of health insurance that one party in Congress would like to see everyone have - choice of plans, no denial for pre-existing conditions, no dropping people because they actually use their health insurance, no higher rates as we get older (other than the usual rate hikes for everyone covered by the same plan), and so on.

We got into the federal government, and worked hard to develop and advance our careers, specifically with retirement in mind. We're almost two years into retirement now, and - knock on wood - it looks like our planning was sound.

We could, if need be, make out okay with just one pension, but then we would absolutely have to move to a lower cost of living area and be much more conscious of every dollar we spend. My parents did fine in retirement living just on my father's pension, but those were much different times.
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Old 01-08-2010, 06:14 AM
 
Location: Northern Virginia
126 posts, read 138,112 times
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Default Two incomes

My wife and I are both Feds. I will retire in 2 years with almost 33 years of service, but the wife just became a fed 2 years ago so she won't have any "retirement" per se. What we've been doing is we did a rough calculation of the post-retirement expenses, and are living on just that income alone. The remainder has two priorities:
1. Eliminate debt (all we have left is mortgage, which will be almost gone in 2 years)
2. Savings and investments

We are both putting the max into the TSP and catch-up. We also try to live way below our income now, and we're not the keeping up with the Joneses kind of couple.
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Old 01-08-2010, 08:14 AM
 
29,779 posts, read 34,867,277 times
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Quote:
Originally Posted by jrkliny View Post
This issue does not just affect retirement but also affects the standard of living throughout the marriage. If both individuals work, there is a lot more money - even with some higher expenses and taxes. In addition raising kids is expensive, so raising kids on a single income can be tough. There is a reason the single income family was able to get by in past generations. First, the costs and standards of living were lower. Even more important the wager earner worked until close to the end of the life expectancy.

Two people with pensions can afford more than two people living off a single pension. What is the mystery?
Not a mystery but a life decision and choice that young couples have to make as they plan their lives and those in the middle years have to account for. It is something that doesn't get often discussed as part of retirement planning but is mostly done in the context of child rearing.

http://www.ncpa.org/pub/st260/
Does It Pay Both Spouses to Work?

Research on the topic

Last edited by TuborgP; 01-08-2010 at 08:25 AM..
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Old 01-08-2010, 08:19 AM
 
29,779 posts, read 34,867,277 times
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Quote:
Originally Posted by GreenGene View Post
That's us - both federal retirees, me with 35 years and my wife with 30. Neither of us have anywhere close to enough time paying into Social Security to be eligible for benefits, but we both have money in the Thrift Savings Plan, we both have very good CSRS pensions, and we are both covered by the type of health insurance that one party in Congress would like to see everyone have - choice of plans, no denial for pre-existing conditions, no dropping people because they actually use their health insurance, no higher rates as we get older (other than the usual rate hikes for everyone covered by the same plan), and so on.

We got into the federal government, and worked hard to develop and advance our careers, specifically with retirement in mind. We're almost two years into retirement now, and - knock on wood - it looks like our planning was sound.

We could, if need be, make out okay with just one pension, but then we would absolutely have to move to a lower cost of living area and be much more conscious of every dollar we spend. My parents did fine in retirement living just on my father's pension, but those were much different times.
I have been a reader on Money magazine over the years and it was always interesting the number of people who were retiring in their late 50's and living the good life who were two income earners with neither having excessively large incomes. Some with and some without pensions. Many were able to save for both their kids college and their retirement with the extra income.
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Old 01-08-2010, 08:29 AM
 
29,779 posts, read 34,867,277 times
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Quote:
Originally Posted by jrkliny View Post
This issue does not just affect retirement but also affects the standard of living throughout the marriage. If both individuals work, there is a lot more money - even with some higher expenses and taxes. In addition raising kids is expensive, so raising kids on a single income can be tough. There is a reason the single income family was able to get by in past generations. First, the costs and standards of living were lower. Even more important the wager earner worked until close to the end of the life expectancy.

Two people with pensions can afford more than two people living off a single pension. What is the mystery?
Does It Pay Both Spouses to Work? - Study #260
Does It Pay Both Spouses to Work?

The analysis on Social Security is interesting.
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Old 01-08-2010, 01:52 PM
 
Location: Alaska
5,356 posts, read 16,347,342 times
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My wife was a SAHM until our youngest moved on to middle school. She then got a state job with pension and benefits. I will say that what she will get in pension and benefits is a definite plus to our retirement plans and makes it certain we can retire when I turn 60. If we had to retire on just my pension and benefits, we might have had to wait until I was 62 before considering retirement.
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Old 01-09-2010, 01:20 PM
 
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My husband and I are both retired. Me for almost 9 years (Fed) and he 4 years (private company). I switched from CSRS to FERS and both of us receive SS - as well as other retirement monies. I have an annuity from the Thrift Savings as well. So far, our outgo has not been more than the incoming funds. We know we will have to tap into other funds (401's, etc.) at some time, but right now we are doing well. Everything paid far, only the utilities and 2 credit cards that are paid in full every month.
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Old 01-09-2010, 01:43 PM
 
Location: Boca Raton, FL
5,170 posts, read 8,694,591 times
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Smile A question on Fed employment

Quote:
Originally Posted by skydiver_jim View Post
My wife and I are both Feds. I will retire in 2 years with almost 33 years of service, but the wife just became a fed 2 years ago so she won't have any "retirement" per se. What we've been doing is we did a rough calculation of the post-retirement expenses, and are living on just that income alone. The remainder has two priorities:
1. Eliminate debt (all we have left is mortgage, which will be almost gone in 2 years)
2. Savings and investments

We are both putting the max into the TSP and catch-up. We also try to live way below our income now, and we're not the keeping up with the Joneses kind of couple.
You say your wife was only employed 2 years ago by the Federal Government. I thought you had to be hired by a certain age. Do they hire people over 50 that will be working for another 20-25 years?
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