Retirement & Financial Planning Report

The increase of women in the workforce in the last several decades will aid the retirement security of many of them but a decline in marriage rates will have the opposite effect, especially for lower-income workers, according to a Government Accountability Office study.

GAO focused on the spousal benefits under Social Security, which now applies to more than nine-tenths of federal employees. In that system, a person is entitled to the higher of his or her own earned benefit, or a spousal/survivor benefit of half of the spouse’s benefit, but not both.

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From 1960 through 2011, the percentage of women aged 62 and older receiving Social Security benefits based purely on their spouse’s (or deceased spouse’s) work record declined from 56 to 25, GAO said. At the same time, the percentage of women receiving benefits based purely on their own work records rose from 39 to 48.

“Rising labor force participation among married women enabled them to contribute more to household retirement savings. From 1992 to 2010, married women’s average contributions to household retirement savings increased from 20 to 38 percent,” it said.

“Eligibility for Social Security spousal benefits among women is projected to decline, in part, because fewer women are expected to qualify based on marital history and more are expected to qualify for their own benefit based on their own work record. For many women, this shift will be positive, reflecting their greater earnings and capacity to save for retirement.”

However, women with low levels of lifetime earnings and no spouse or spousal benefit may face greater risk of poverty in old age, it said. It said, for example, that in 1960, among persons age 15 or older 68 percent were married, 22 percent had never been married (the rest were divorced or widows or widowers). In contrast, in 2010, only 54 percent were married and 31 percent had never been married.