Life’s milestones: Delayed, but diminished?

By Russ Banham
Russ Banham is a Pulitzer Prize-nominated journalist and author of 26 books on business and management.
Posted on Jan 5, 2018

Traditional adult milestones are occurring later in life, with Americans getting married, having children, owning a home, and retiring at ages older than their generational forebears.

Certainly, it seems beneficial to take one’s time to choose a spouse, settle down, have kids, and buy a house. There are plenty of examples showing the possible negative consequences of rushing key life events, including high divorce rates, emotionally scarred children, and rising personal bankruptcy rates.

But does postponing these milestones signal a more fundamental change?

It depends.

Take marriage, for example. Roughly half of adults in the United States are married today, down 9 percentage points over the past 25 years and 22 percentage points from 1960, according to the Pew Research Center. Its study indicates that the median age in 2016 for a first marriage was 27.4 for women and 29.5 for men — about seven years more than the median ages in 1960, when they were 20.3 and 22.8, respectively.1 

Is this a trend?

“Since the 1930s, people have gotten married later and later each successive decade,” said Allen Downey, a professor of computer science at Olin College whose research focus is data science, in an interview. “What is more difficult to discern is if people get married at the same rates eventually, and if the fraction of people who never get married is increasing.”

Downey conducted a study using data from the National Survey of Family Growth and the National Center for Health Statistics. The upshot: Women and men born in the 1980s and 1990s are not just getting married later, they’re on pace to stay unmarried at rates higher than previous generations — in the case of women, substantially higher.

“The fraction of women unmarried at age 33 has increased from 9 percent for women born in the 1940s to 38 percent for women born in the 1980s, and is projected to reach 47 percent for women born in the 1990s,” said Downey. “For men, the fraction unmarried at age 33 has gone from 27 to 44 percent, and is projected to reach 50 percent for men born in the 1990s. Whereas with previous generations, fewer than 20 percent of the population never married, in the future it might be 30 to 40 percent. Those are pretty striking changes for a period of only 50 years.”

Kids and houses are great, just not now

The age at which people have their first child also is getting older. For the first time in recorded history, more women in their early 30s are having babies than women in their 20s and teen years, according to recent data released by the Centers for Disease Control and Prevention.2 The birth rate for women aged 30 to 34 was about 103 per 1,000; the rate for women aged 25 to 29 was 102 per 1,000. The average age when women had their first child was 26.3 years in 2014, up from 24.9 in 1999, according to the National Center for Health Statistics.3

The reasons why women are biding their time include the pursuit of higher education, later-age marriages, and better pay for staying in a job longer.

“Women have higher expectations of our personal lives, which is resulting in decisions to defer when to have kids or when to get married,” said Stephanie Coontz, director of research at the Council on Contemporary Families, a nonprofit organization of family researchers.

Statistics back her up. According to the U.S. Census Bureau, more than half of Americans say getting married or having children is not important to becoming an adult, and only a third think they are somewhat important.4

“Less than 10 percent of men and women think that people need to have children to be very happy in life,” the Bureau stated. “Instead, the highest ranked milestones are educational and economic.”

These same expectations may explain why fewer people are buying homes, preferring instead to rent them. According to a July 2017 report, the U.S. Census Bureau tallied the homeownership rate at 63.6 percent in the first quarter of 2017.5 That’s a nearly six percent decline since 2004, when the homeownership rate was 69.4 percent.

The age at which people buy their first homes also is higher, according to a survey of 11,000 homeowners by AA Life Insurance. While almost 83 percent of respondents 55 and older stated they had purchased their first home before turning 36, only 37 percent of those currently aged between 17 and 35 have reached the same milestone.

While 31.53 percent of those aged 55 and over “strongly agreed” with the idea that owning a home was a “lifestyle choice,” just 19.11 percent of those under 25 had the same opinion.

That last statistic may be the reason behind an extraordinary finding—more 18-to-34-year-olds are living with parents than with a spouse or on their own, according to the Census Bureau. In fact, it’s the primary means of shelter for this cohort of people — and often not by choice but by economics (i.e., they cannot afford to move out and live independently). Whether or not this trend continues is open to question.

Working longer and longer

Another traditional rite of passage is also changing — people are retiring later than their parents and grandparents did. Nearly one in five individuals 65 years and older now work at least part-time — the highest this has ever been, according to the U.S. Bureau of Labor Statistics (BLS).

This demographic of older individuals is on target to become the fastest growing segment of the workplace by 2024. That year, 36 percent of 65- to 69-year-olds will be active participants in the labor market, up from 22 percent in 1994. BLS chalked up the factors behind deferred retirements to longer life expectancy, healthier people, the desire for a more financially secure future, and simply liking the work they do.

The latter is the case at Vita Needle Company, a manufacturer of stainless steel needles and tubes, where the median age is 74 and the oldest employee is 99. Caitrin Lynch, a professor of anthropology at Olin College, studied the unusual age cohort at Vita in her book, “Retirement on the Line.”

“What was most interesting was that everyone really liked what they were doing —working alongside people they’d known for decades doing things they were good at,” said Lynch, in an interview. “The paycheck was nice, but more important was their sense of purpose and community.”

As time flies by, expect more companies to have a larger cohort of older workers or, as companies reshuffle their labor pools, for older workers to at least stay in the overall job-seeking workforce.

According to the 2017 Retirement Confidence Survey, four in 10 workers now plan to work until they’re at least 70 years old. While many simply miss the work itself, others lack the financial means to maintain the standard of living they previously enjoyed.

“These changes are upsetting what economists call the dependency ratio,” said Lynch. “The long-held assumption was that people under 18 and over 65 were dependents. As this ratio dramatically changes, companies will need to provide more flexible work-life schedules for older people. The idea of going `cold turkey’ and simply quitting work at 65 is becoming pretty unusual, particularly when you consider you’ve lived possibly only two-thirds of your life span.”

The price of postponement

There are obvious economic consequences from people delaying marriage, children, home ownership, and retirement.

“Housing formation is a major driver of aggregate demand in the economy,” said Robert Hartwig, an associate professor of finance at the University of South Carolina’s Darla Moore School of Business. He pointed out that a wide range of businesses in the construction, financial, and retail sectors would feel the effects of a downturn.

On the bright side, he said that longer term the future may not be all that much different.

“Generation Z may be buying homes later, but they will still buy them,” he explained. “People may be getting married later, but when they do they’ll have two incomes and a government tax deduction, meaning more disposable income to spend. Older married couples may even be less likely to divorce, compared to past generations.”

Downey affirmed this last point. According to his research, people marrying later in life are no more likely to divorce than other age groups during the first 10 years of marriage, but after that may be “substantially less likely” to get divorced. At 16 years, the fraction of intact marriages is 67 percent for older marrieds, compared to 59 to 61 percent of younger marrieds in prior generations, according to Downey’s study.

Having children later in life also doesn’t mean fewer children overall.

“There was a `birth dearth’ during the Great Recession, but now these people are in their 30s they’re catching up to historical norms,” said Hartwig. “Since longevity is increasing, they’re still likely to be around when their grandkids grow up. And while many people of all ages plan to work until they `drop dead,’ the reality is that most will retire in their mid-to-late 60s, assuming Social Security continues to pay out in one’s 60s.”

As for the great diaspora of young people migrating to urban centers, this, too, will pass, researchers argue.

“Once people get married and have kids, they’ll want larger homes with backyards in places where the public schools are good,” said Hartwig. “They’ll likely follow previous generations in heading for the suburbs and exurbs. In turn, this means longer job tenures and investments in life insurance, annuities, and retirement funds.”

So ultimately, while life milestones are occurring later in life, the trend seems to be offset by people on the whole living longer. The same life choices will be made, just on a longer timeline.

What goes around comes around—maybe a bit later than usual, but not all that different after all.

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Pew Research Center, “As U.S. marriage rate hovers at 50%, education gap in marital status widens,” Sept. 14, 2017.

Centers for Disease Control, “Births: Provisional Data for 2016,” June 2017.

National Center for Health Statistics, “Mean Age of Mothers is on the Rise,” January 2016.

U.S. Census Bureau, “The Changing Economics and Demographics of Young Adulthood: 1975-2016,” April 2017.

U.S. Census Bureau, “Quarterly Residential Vacancies and Homeownership, Second Quarter 2017,” July 27, 2017.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.