When most of us picture retirement, we imagine traveling the world with our spouse, or just spending time relaxing together. But new research shows couple shouldn’t always retire at the same time. Instead, the research suggests that there are huge benefits if one spouse continues working after the other one retires.
The advice comes from Harvard Medical School researchers, who looked at the data from 20,000 couples. What they found is that an almost all traditional marriages, women should keep working after their husbands retire. The same rules apply to non-traditional marriages if one partner stepped out of the workforce.
When Harold Coleman is out in his woodshop tinkering, his wife Sloan Coleman is often in her office making money. Five years ago she started selling real estate. Harold is like her unpaid intern. “We kind of took a roll reversal so now I'm the house dad instead of the housewife,” said Harold.
The Colemans have been married for 33 years. They met when they were both working in telecommunications. Together they’ve had two kids and two successful careers that took them both all around the world. But when Harold decided to retire at 63, Sloan, who at the time was only 58, decided it was too soon for her.
“Because we live longer than men do!” said Sloan.
Using average life expectancy in the United States, researchers from Harvard Medical School determined a man who retires at 62 would collect a total of about $167,000 in Social Security checks before he dies. If his wife were to start collecting checks at the same time, she would collect about $145,000. But if his wife waited to retire at 70, by the time she died, she will collect almost $160,000. That’s a $15,000 difference.
CPA Jeff Beckley said our benefits are based on an earnings average.
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“It starts with taking the highest 35 years of your life time annual income. It's not what you finish at... it's not a 10 year average... it's 35 years,” said Beckley.
Beckley said that women should work until 70 not only because they live longer, but also because they have a much higher earning potential later in life than men do.
“A woman that marries in her 20s, has kids, stays at home, waits till the kids go to college and then says, you know what, I want to go out and start a career. If you had 10 years where you were say raising the children and you had no income, you still have between the ages of 21 and 70 you still have an extra 35+ years to make up for those 10 years of zeroes,” said Beckley.
Harold Coleman, now 68 said he loves working with, and for his 58 year old wife. They were both surprised by how small his Social Security checks was, which is why he is encouraging his wife to work just as long as she likes.
“I'd like to get to 70, then I get the maximum benefits of what I could've done with my Social Security,” said Sloan.
CPAs say that the fear of Social Security becoming insolvent is politically unlikely. They also strongly discourage people from planning a retirement portfolio based on the total number of years their parents lived.
