Fewer retirees are expected to receive spousal or survivor benefits from
The report, released Wednesday by the
“These trends were more pronounced for individuals with lower levels of income and education and for certain racial and ethnic groups,” said the report. “Over the same period, labor force participation among married women nearly doubled.”
Taken together, these trends have resulted in a decline in the receipt of spousal and survivor benefits and married women contributing more to household retirement savings.
From 1960 through 2011, the percentage of women aged 62 and older receiving
Further, as of 2010, among married households receiving pensions, 40 percent had elected not to receive a survivor benefit. 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.
In the future, fewer retirees will receive spousal or survivor benefits from
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.
Marriage has historically helped protect the financial health of couples and surviving spouses in old age, the GAO noted.
“Based on their marriage, and independent of their own work history, spouses may receive retirement and survivor income through
In recent decades, marriage has become less common, more households have two earners rather than one, and many employers have shifted from defined benefit plans to defined contribution plans.
For private plans, the shift from defined benefit to defined contribution plans increases the vulnerability of spouses because of different federal protections for spouses under these plans. DB plans are required to offer survivor benefits, which can only be waived with spousal consent. In contrast, DC plan participants generally do not need spousal consent to withdraw funds from the account.
For the report, the GAO analyzed nationally representative survey data, including the Survey of Consumer Finances, the Survey of Income and Program Participation, and the
|Copyright:||(c) 2014 Financial Planning. All rights Reserved.|
|Source:||Source Media, Inc.|