Expenditure patterns of older Americans, 2001-2009

PRE- AND POSTRETIREMENT EXPENSES: Before retirement, people pay FICA taxes, incur work-related expenses, and set aside money for retirement. But after retirement, most people have different financial obligations, and, as a result, retirees may still be able to maintain their level of preretirement well-being with very different income levels. Studying income, expenditures, and wealth-holding patterns together provides a more complete idea of how people are doing in terms of being able to afford retirement than arbitrary estimates such as income replacement ratios. UNIQUE DATA: This Issue Brief examines the expenditure patterns of the older section of the population. It uses data from the Consumption and Activities Mail Survey (CAMS), a supplement to the Health and Retirement Study (HRS), conducted by the Institute for Social Research at the University of Michigan, contains detailed expenditure data on 32 categories, and follows the same group of individuals over eight years In addition, the income and wealth data available in the HRS are used to establish the financial standing of older households. DECLINING EXPENSES: Household expenses steadily decline with age. With the age 65 expenditure as a benchmark, household expenditure falls by 19 percent by age 75, 34 percent by age 85, and 52 percent by age 95. HOME EXPENSES: Home and home-related expenses remain the single largest spending category for older Americans. On average, those over age 50 spend around 40-45 percent of their budget on home and home-related items. RISING HEALTH CARE EXPENSES: Health-related expenses are the second-largest component in the budget of older Americans. It is the only component which steadily increases with age. Health care expenses capture around 10 percent of the budget for those between 50-64, but increase to about 20 percent for those age 85 and over. DEMOGRAPHIC GROUPS: Singles, blacks, and high school dropouts do not have a sound financial standing in retirement. Their expenditures exceed their income and they hold very little financial wealth. The bottom income quartile, which includes mostly these demographic groups, has the weakest financial standing in retirement. LONG-TERM CARE and PRIVATE HEALTH INSURANCE: Long-term care and some form of private health insurance coverage have a significant effect on increased spending by older households.     

Money, power and inequality within marriage

The growing body of research on the intra-household economy suggests that in couple households there are significant associations between control over household finances and more general power within the household. However, most earlier research has been based on relatively small samples. Here a major new British data set, produced by the Social Change and Economic Life Initiative, is used to examine the relations between money, power and inequality within marriage. Six different systems of financial allocation are identified. The results suggest that even when couples nominally pool their money, in practice either husband or wife is likely to control the pool. In only one fifth of couples was the pool jointly controlled, but these households were characterised by the highest levels of equality between husband and wife in terms of decision making, experience of deprivation and access to personal spending money. Findings from the study indicate a complex pattern of relationships between household income level, household allocative system and gender. Female control of finances, though it was associated with greater decision-making power for women, did not protect them against financial deprivation; however, male control of finances, especially when it took the form of the housekeeping allowance, did serve to protect the financial interests of men in comparison with women. Gender inequality was least in households with joint control of pooled money and greatest either in low income households or in higher income households with male control of finances.     

Family financial roles assumed by sex trafficking survivors upon community re-entry: Findings from a financial diaries study in the Philippines

People who have been trafficked often face substantial financial challenges upon exiting human trafficking and re-entering the community. This article presents findings from a 6-month financial diaries study with the households of 30 women in Cebu City, Philippines, who were trafficked into sex work. Data from 352 interviews with sex trafficking survivors and their family members were utilized to explore the roles that trafficking survivors played in promoting the economic well-being of their families upon community re-entry, as well as the challenges they faced in fulfilling these roles. Findings revealed that women who were trafficked balanced multiple roles in their families—including that of income earner, household financial manager, and financial providers for the extended family. Survivors’ limited access to employment was a key barrier that impeded their ability to achieve financial stability for themselves, their children, parents, and other family members. The employment status of trafficking survivors affected numerous crosscutting factors—including the extent to which they were able to control household finances, redistribute income to their parents, and leave violent relationships. Findings reinforce the importance of safe, sustainable employment opportunities for the security and well-being of trafficking survivors and their families.     

Conceptualizing Household Distribution of Labor from Feminist Theory: Why Power Matters in Psychotherapy

ABSTRACT

This article reviews existing literature on unequal distributions of household labor among heterosexual dual-earner marriages in the United States. Specifically, this article summarizes the literature linking women’s continued performance of the majority of household labor to decreased well-being and overall functioning and situates this problem in the context of psychotherapy. Feminist theory is used to conceptualize this topic by exploring the role of equality in women’s relationships with their spouses. This article suggests that although women and men are likely to agree with the basic tenets of equality, few individuals attain this ideal in psychotherapy due to gender-based assumptions that continue to influence the perceptions and behaviors of all people (e.g., clients and psychotherapists alike). Implications for clinical practice and research are discussed.     

Women’s Household Preparation for Retirement at Young and Mid-Adulthood: Differences by Children and Marital Status

There are increasing concerns about whether Americans are saving enough for retirement. Recent research has called for improved understanding of the relationship between family structure and economic preparation for retirement at earlier stages of the life course. Using multiple years of the Federal Reserve Board’s Survey of Consumer Finances, we examined how number of children and marital status were associated with women’s household retirement savings at young and mid-adulthood. Several household-level indicators of retirement preparation were considered: desire to save for retirement, retirement account ownership, eligibility to participate in a defined-contribution plan, participation in defined-contribution plans, and retirement account wealth. Results from regression analyses revealed variation in women’s household financial preparation for retirement at young and mid-adulthood by family context. Additional children were negatively associated with several measures of retirement preparation among single-female households but not for couple households. Overall, we found that low economic preparation for retirement is an additional economic disadvantage facing single mothers at young and mid-adulthood, with potentially long-term implications for their financial security. The results shed light on linkages between family structure and women’s economic status.     

Household Headship Among Married Women: The Roles of Economic Power, Education, and Convention

Household headship historically has been equated with being the main economic provider of the household, a position usually occupied by men. This paper uses a change in the United States Census definition of household headship to examine whether headship for married women is associated with being the primary breadwinner in a marriage versus other non-economic explanations. According to microdata from the 1990 United States Census, women who are the main income providers in a marriage are much more likely to be household heads than women in co-provider marriages. There also is support for an egalitarian ideology explanation; that is, when both spouses are highly educated, the wife is more likely than the husband to be household head net of her relative economic independence in that marriage. Yet the force of convention remains strong given the low prevalence of headship among married women. The new census definition was meant partly to reflect the changing economic status of women. However, the reality is that conventional gender behaviors persist in household headship.     

Financial manager's perception of rural household Economie Well-Being: Development and testing of a composite measure

An index of Perceived Economic Well-Being is constructed using factor analysis and tested for reliability and validity. The index is composed of (a) perceived income adequacy, and satisfaction with (b) current total household income, (c) amount of money your family is able to save, (d) amount of current debt, (e) level of consumption, (f) amount of household net worth, and (g) resources available to meet a financial emergency. The index is used in regression analysis. Results show that financial managers perceive economic well-being more favorably if they are more satisfied with resources and with the current level of living, view the present financial situation as better compared to 5 years ago, save on a regular basis for goal(s), and have a higher income. Financial managers who report more frequent financial problems, worry more about where money would come from to pay bills, and more frequently make only minimum payments on charge accounts perceive economic well-being less favorably.Preparation of this research was supported in part by the Illinois Agricultural Experiment Station. Data were collected in conjunction with the cooperative regional research project NC-182, Family Resource Utilization as a Factor in Determining Economic Well-Being of Rural Families. Cooperating states are Arizona, California, Illinois, Indiana, Iowa, Kansas, Michigan, and Minnesota.He received his Ph.D. from the University of Illinois in 1991 with Dr. Fitzsimmons as advisor. His current research interest is economic well-being.She received her Ph.D. from the University of Illinois; her current research interests include gender roles, family financial management, and economic well-being.     

The Role of Family Income in the Intergenerational Association of AFDC Receipt

Daughters from low‐income families who did not receive Aid to Families with Dependent Children (AFDC) are compared to daughters from low‐income families who did receive assistance to better account for family income in the intergenerational association of AFDC. The research models the timing of a daughter's first birth and, for those who become mothers, the number of years a daughter receives any AFDC. Women whose families received AFDC during their childhood are more likely to receive AFDC as adults relative to those women whose families did not receive AFDC. Controlling for family income in a more careful and comprehensive way than past research explains part but not all of the effects of childhood AFDC receipt. Among daughters from chronically poor families, however, parental AFDC use is not associated with additional years of AFDC participation. Although the present research cannot confirm or deny a causal role for parental welfare use, the intergenerational transmission of financial resources does explain part of the intergenerational association of welfare use.     

Unsanctioned births in China

This study hypothesizes that "unsanctioned" births (beyond the limit authorized by the government) in China are more likely among couples who have strong traditional fertility norms and less likely among couples who adopt new family planning norms. The theoretical framework is based on cultural conflict theory as developed by Sellin. Data are obtained from 6654 ever married women aged under 49 years from the 1987 In-Depth Fertility Survey for Guangdong province. Over 30% of the sample were married before 20 years of age. 20% had 1 child, 26.7% had 2 children, about 23% had 3 children, 13.9% had 4 children, and under 10% had 5 or more children. The average number of living children was 2.5. Findings reveal that socioeconomic status was significantly related to unsanctioned births; they were more common in less developed areas and among women of lower socioeconomic status (SES). Persons living in areas with a high monetary contribution per person in family planning efforts at the county level were less likely to have unsanctioned births. Women who lived in urban areas, worked in state enterprises, and had parents with high educational status were less likely to have unsanctioned births. They were more likely among women who married at an early age, lived with parents after the marriage, had female living children, and had failed pregnancies. They were also more likely among women who had arranged marriages, a traditional desire for large family sizes, an early marriage ideal, and a preference for sons. Knowledge of family planning and greater use of abortion were related to a lower incidence of unsanctioned births. Women who talked with their husbands about their family size desires were less likely to have unsanctioned births. Parental educational attainment only had an influence among rural women. Variables impacted on fertility differently in urban and rural areas.     

Impact of retirement type on income for people with disabilities

The purpose of this paper is to investigate the impact of involuntary retirement on the economic security of persons with a disability. Very little research examines the economic consequences to forced retirement and no research focuses on persons with disabilities who have a higher rate of involuntary retirement than the general population. Analysing the 2006 Canadian Participation and Activity Limitation Survey, we find that persons with a disability who involuntarily retire have lower median personal and household incomes and they are more likely to be under the low-income cut-off point than those who retire voluntarily. When socio-demographic, socio-economic and geographical characteristics are controlled; those who retired involuntarily are more likely to be under the low-income cut-off point than those whose retirement was voluntary. Further, those who retired involuntarily are more likely to receive disability benefits whereas those who retired voluntarily are more likely to receive retirement income. The authors argue for employers and governments to implement accommodation in the workplace and flexible employment opportunities so that more persons with disabilities are able to continue in their employment for as long as possible.     

The Relationship Between Life Satisfaction Among Wives and Financial Preparedness of Households in Japan

The wealth gap between the rich and poor is widening and contributing to Japan’s shrinking middle class. This study examined concerns about the future and life satisfaction and their association with household financial preparedness (e.g., savings, investments, life insurance) among married women in Japan. Double-hurdle models assessed the probability of having savings and the amount of these savings, using the sample from the 2006 Japanese Panel Survey of Consumers (n = 1,206). Supporting earlier works from several other countries, concerns about the future were positively associated with the probability of having supplemental life insurance. Moreover, life satisfaction levels were positively associated with the probabilities of having savings, investments, and supplemental life insurance and with the amount of the investments. The findings suggest economic inequalities among women could widen in the future, as those who have and are expecting to have more financial resources are more likely to be prepared for future financial needs than those who do not.     

Family Types, Direct Money Transfers from Parents, and School Enrollment among Youths

Intrafamily resource transfers have not been studied extensively as a process that may help reduce the well-being disadvantage of stepchildren in parental remarriages relative to biological children in parental first marriages. The process is examined here by analyzing the link between direct parental money transfers and academic outcomes, as measured by enrollment. I develop and test two alternative hypotheses pertaining to a part of this link, which distinctly applies to children of remarried stepfamilies--the component not shared with children in intact families. An adaptive strategy hypothesis posits a well-being enhancing distinct component, operationalized as a positive interaction effect between measures of parental transfers × stepchildren in parental remarriages. A compromised use hypothesis posits a well-being compromising one, implying a negative interaction effect. Two sets of results from analyzing data on 18-21 year olds over multiple years (Nyouth-age=5,736, Nperson=3,615) in the first five waves of the National Longitudinal Survey of Youth 1997 (NLSY97) support the adaptive strategy hypothesis: a) the interaction effect (income received from parents × being a stepchild in a parental remarriage) has a positive sign; and b) this interaction effect is consistently positive, whether the youth is at risk of attending high school or college, even when the direction of the shared component of the link, as measured by the main effect of income from parents, varies by the level of schooling. The results suggest the presence of a robust well-being enhancing money transfer mechanism supporting children in some remarried stepparent families.     

Child Support Awards

Child support is an important factor in the financial well-being of divorced mothers who have dependent children. Although the financial effects of child support awards have been studied for a number of groups, they have not typically been explored inrelation to "in-kind" income factors such as insurance payments that may be part of a divorce settlement. Data on divorce awards were collected from court records. Child support awards were examined to determine which factors influence the likelihood of award and the amount of child support awarded. Factors which were found to differentially influence amount of child support awarded were home ownership, award of alimony, length of marriage and award of in-kind income.     

Self-Defined Retirement Status and Engagement in Paid Work among Older Working-Age Women: Comparison between Childless Women and Mothers

Utilizing data from the 1992–1994 Health and Retirement Study (HRS), this paper examines the question of whether three groups of older working-age women—childless women, mothers with at least one child at home or temporarily away at school, and mothers with all their children living away from home—were different or similar in their likelihood of retirement and their actual work status. The results show that the childless group and the child-not-at-home group were more likely than the child-at-home group to define themselves as retired, although the three groups were equally likely to engage in paid work activities. Both early childbearing history and ongoing parental financial obligations appear to influence women's willingness to assume a retiree versus a nonretiree status. The findings may reflect an emerging trend of retirement being a status symbol rather than a marker of complete cessation from the world of work.     

Adolescents from Stepfamilies,Single-Parent Families and (In) Stable Intact Families in The Netherlands

This aiticle 'examines the effects on intimate relation- ships, relational attitudes, and well-being of growing up in: stepfami- lies after divorce, single-parent families, instable intact families, and stable intact families. Data are used from the national panel study USAD (Utrecht Study of Adolescence Development), a study of de- velopments as they occur in the life course of young people during h e 1990s. Results are presented from 2,064 respondents between 15 and 25 years of age, about their well-being and their development in inti- mate relationships and their views on (marriage) relationships. On a number of topics their parents are interviewed as well. From the analysis, it is clear that young people who lived in single- parent families and in stepfamilies significantly differ from young people who lived in stable intact families. Young people from single- parent families are more likely to start their relational career sooner and reported more problems with intimate relations than youngsters from stable intact families. Youngsters from stepfamilies have more modem views on relations than people from intact families. Adolescents from instable intact families have moderate scores. Most of these effects re- main when the results are adjustdfor differences in social class, family income and the parental views on family life.     

Changes in financial status influencing level of satisfaction in households

This study explores the impact of changes in family financial status over a four year period on level of satisfaction with various aspects of household finances. Data were collected through personal interviews with 123 families in 1982 and 1986. Information was obtained on household income, assets, liabilities, and on the satisfaction of the money managers with seven aspects of household finances. Two-tail pairedt-tests were used to compare differences in financial and satisfaction variables between the two time periods. Regression analyses were applied to ascertain factors affecting the satisfaction of the money managers. The financial status of households improved during the 4 year period as reflected by net worth. The mean net worth, with and without real estate, increased significantly during this time period. In spite of this improvement, money managers are less satisfied with various aspects of their household finances.This research was supported by the Iowa Agriculture and Home Economics Experiment Station Project No. 2773 (Journal Paper No. J-13098).Tahira K. Hira is a Professor and Alyce M. Fanslow is a Distinguished Professor in the College of Family and Consumer Sciences; Patricia Titus is an Instructor in the College of Education; all are at Iowa State University, Ames, IA 50011-1120. Dr. Hira's research interests include consumer bankruptcies and various aspects of household economic well-being Dr. Fanslow's and Dr. Titus' research interests include competencies of household money managers.     

Money in remarriage: keeping things simple – and separate

This paper investigates money matters in remarried couples. The number of such couples is on the increase, and their financial affairs are likely to be more complex and conflictual than for first-married couples, but there has been little research attention paid to this group in Britain. The present study explores patterns of control and management of money by means of data from semi-structured interviews with 20 couples in which one partner or both had been married before. The men and women were interviewed separately, but in the majority of cases, simultaneously, in separate rooms. This yielded data from 38 interviews since two men declined to take part in the study. Ages of respondents ranged from 28 to 83, with the majority in the 30–55 range. At the time of the study, only half still had dependent children, and not all of the latter were co-resident. A key finding of the study is a degree of separateness in financial arrangements that is in sharp contrast to earlier findings. As many as half of the couples were using an Independent Management system, compared with less than 2 per cent of couples in general. For those with children from previous relationships, this separateness was especially marked in the way they wished their assets to be treated after their death. However, in line with earlier studies, the balance of economic power in second and subsequent marriages still appeared to favour the men, who generally had larger incomes and owned more assets in their own names.     

The retirement system in transition: the 2007 Retirement Confidence Survey

WORKERS SLOW TO SEE OR ADAPT TO A CHANGING U.S. RETIREMENT SYSTEM: The 17th annual wave of the Retirement Confidence Survey (RCS) suggests that American workers may be slow to recognize how the U.S. retirement system is changing, and those who are aware of these changes may not be adapting to them in ways that are likely to secure them a comfortable retirement. HALF OF WORKERS LESS CONFIDENT ABOUT PENSION BENEFITS: The RCS finds pension-plan changes by employers have left nearly half of workers less confident about the benefits they will receive from a traditional pension plan, but that those experiencing a decline in retirement benefits often fail to react constructively. Moreover, although Americans will rely increasingly on 401(k) retirement savings plans and other personal savings and investments to fund their retirement security, data suggest that many may not follow professional investment advice when it is offered to them. MANY WORKERS COUNTING ON BENEFITS THAT WON'T BE THERE: Many workers are counting on employer-provided benefits in retirement that are increasingly unavailable. Only 41 percent of workers indicate they or their spouse currently have a defined benefit pension plan, yet 62 percent say they are expecting to receive income from such a plan in retirement. Likewise, workers are as likely to expect as retirees are to receive retiree health insurance through an employer, even though the number of employers offering this benefit to future retirees is declining. MANY WORKERS UNLIKELY TO HEED INVESTMENT ADVICE EVEN IF THEY GET IT: More than half of workers indicate they would be likely to take advantage of professional investment advice offered by companies that manage employer-sponsored retirement plans. However, two-thirds of these workers say they would probably implement only some of the recommendations they receive and 1 in 10 think they would implement none of them. AMERICANS OVERESTIMATE LONG-TERM CARE COVERAGE: One-quarter of workers and more than one-third of retirees report they have long-term care insurance (separate from health insurance, Medicare, and Medicaid) to help pay for care they might need in a nursing home, assisted living facility, or at home. But only 10 percent of Americans age 65 and older are estimated to have had private long-term care insurance in 2002, suggesting that many are counting on coverage they do not actually have. MOST SAVINGS LEVELS ARE MODEST: Almost half of workers saving for retirement report total savings and investments (not including the value of their primary residence or any defined benefit plans) of less than $25,000. The majority of workers who have not put money aside for retirement have little in savings at all: Seven in 10 of these workers say their assets total less than $10,000. CONTINUED IGNORANCE ABOUT SOCIAL SECURITY COVERAGE: Despite the longstanding increase in the eligibility age for Social Security, only a small minority of workers are aware of the age at which they can receive full retirement benefits from Social Security without a reduction for early retirement.     

THE PRICE TAG OF RESPONSIBILITY

An opportunity in single-parenthood for women is the enhanced sense of competence. Yet, a well-documented hazard is depressed well-being. Remarriage may reverse these outcomes. This study compared two matched samples of divorced and remarried mothers. Contrary to the research hypothesis, remarried mothers had both a higher sense of competence and well-being than divorced mothers, which was significantly related to feelings of competence and satisfaction in the areas of love, community, and homemaking. There were no differences in other areas, such as work or parenting. Differences in income were significantly related to these outcomes, but did not predict a particular competence and well-being type. Remarried mothers were high on the "Love Competency" and "Achievement" Factors and low on the "Friendships" Factor, while the reverse was true for the divorced; these differences best distinguished the two marital groups. Overall, the sense of competence and well-being were dependent and dynaniically inseparable, both globally and in specific life areas. Risks to the sense of competence and well-being for single-parents were feeling in control of and satisfied with their time, finances, current lives (especially in areas of love, community, homemaking), aspirations, and futures. With proper attention to the legitimization and support of the single-parent, intervention might best focus also on single-parenthood as a training ground for self-empowerment and not remarriage.     

Retirement financial preparation:implications for policy

Financial preparation for retirement is key to positive outcomes for future cohorts. Studies suggest that insufficient preparation is occurring among Baby Boomers. Data from community-dwelling adults (N = 1508, ages 40-70) show that most respondents (22-75%) had taken four specific preparation steps, and few reported negative attitudes toward planning. Five correlates (gathering information, locus of control, self-definition as household planner, financial worries, and negative attitudes) and demographic variables tested in bivariate analyses showed most having associations with preparation. In multivariate analyses, however, only two correlates (gathering information and negative planning attitudes) and demographics (race/ethnicity, education, income, health, age, and education) explained planning behavior.