What You Need to Know
- The researchers say women born from 1942 through 1947 who were married more than half of their adult lives had the best retirement readiness around 60.
- An increase in the retirement age reduced Social Security income across the board.
- Meanwhile, never-married women's expected earnings replacement rate has increased.
An increase in the U.S. retirement age and changes in how couples build up Social Security benefits have wiped out most of the retirement preparedness edge that married women once had over other women, according to a team of economists led by Alicia Munnell.
Munnell’s team divided women into three groups: women who had never been married; women who had been married for fewer than half of their adult lives, who were classified as “mostly single”; and women who had been married for more than half of their adult lives, who were classified as “mostly married.”
The team then used national survey data to estimate how much wealth women in different marital status categories, and in different age groups, had when they were about age 60.
The team found that the median pre-retirement wealth level was much lower for mostly married women born from 1954 through 1959, in the middle of the baby boom, than for the mostly married women born from 1942 through 1947.
“The reason is, in large part, the declining economic fortunes of their husbands, who experienced the full impact of the rise in Social Security’s full retirement age and labor market setbacks during the Great Recession without countervailing improvements in education and earnings,” Munnell’s team writes, in a paper posted on the website of the Boston College Center for Retirement Research.
Another issue is that, as more married women have entered the workforce, existing Social Security benefits calculation rules have tended to reduce the percentage of a couple’s pre-retirement earnings that the couple’s Social Security benefits will replace.
Munnell is director of the Center for Retirement Research at Boston College and the author of many of the academic papers that have shaped public and private U.S. retirement benefits arrangements.
She wrote the new paper with Siyan Liu and Laura Quinby, who are both researchers at the center.