Why Marriage Can Turn Into A Retirement Income Loss
- Lower Social Security Earnings
- Saving for only one spouse
- Married and then divorced
A recent study by the Center for Retirement Research at Boston College finds, "Women are spending an increasing proportion of their lives single… Not surprisingly, women in their 50s who are married appear to be much better off than single women by all of the standard economic measures of earnings and wealth. However, this situation does not translate into better retirement preparedness – in fact, married women are more likely to be at risk for retirement than single women."
"The reasons for this counterintuitive result are threefold. First, married couples with two earners – the majority of married couples in their 50s – are receiving lower Social Security benefits relative to their household earnings due to the declining relevance of the spousal benefit and the program’s progressive benefit design. Second, two-earner couples with just one person saving for retirement tend to undersave because the saver often does not take into account the need to save for his spouse. And, finally, almost a third of the married women in the analysis had been through a previous divorce, and the financial scars left by divorce often linger."1
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“Women, Marriage, and the National Retirement Risk Index” by Alicia H. Munnell, Wenliang Hou, and Geoffrey T. Sanzenbacher