2 Reasons Women Should Not Retire With Their Spouses

Most married couples in the U.S. retire around the same time — a move that tends to cost women more than it does men, according to a recent study.

This cost can mean decreased retirement income or increased retirement expenses — or both, says Nicole Maestas, associate professor of health care policy at Harvard Medical School.

Maestas examined the earnings of married women who are middle-aged or older to determine whether continued work offers women a larger return than it does to married men.

Her findings were published earlier this year by the National Bureau of Economic Research and in the recent book “Women Working Longer.”

Maestas’ findings include two key reasons that retirement can be costlier for women who quit working at the same time as their husbands do. Both reasons stem from the fact that many women are younger than their husbands.

Specifically, Maestas reports that 63 percent of early baby boomer women — those born 1948 to 1953 — are married to older men. And 69 percent of women born 1942 to 1947 are married to older men.

1. They miss out on high-earning work years

Women who are younger than their spouses but retire at the same time as their spouses thus end up retiring at a younger age.

Due to them retiring younger — possibly after having paused their careers to have children — women tend to be hitting their peak earnings years just as they retire, Maestas says.

On the other hand, men retire at an older age and usually don’t experience career interruptions for children. So, they tend to be past their peak earnings years by the time they retire.

This makes the opportunity cost for simultaneous retirement greater for women. By retiring alongside their husbands, women risk forgoing some or all of their peak earning years. That means they rack up less earnings over the course of their careers, which can hurt their personal savings and their Social Security benefits.

Additionally, when women retire at a younger age, their savings have fewer years to grow compared with men’s savings.

Maestas concludes:

“This difference in age at retirement seems counterintuitive since women have longer life expectancies and have shorter careers due to delayed or interrupted labor force participation while raising children. Thus, they should optimally retire at older ages than men.”

2. They face higher health care costs

Say a 62-year-old woman and her 65-year-old spouse retire at the same time. They face significantly different health insurance options. The man is eligible for Medicare, while the woman is three years away from Medicare eligibility.

So, without an employer or Medicare to cover some if not most of her insurance costs, the woman will have to obtain an insurance policy independently — which tends to be the most expensive option.

Again, if women who are younger than their husbands retire after their husbands, they can avoid this added cost.

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