If Wife Marrys Again After Divorce Is She Still Entitled to Half of Retirement
For decades, policymakers have discussed how to remedy the high poverty rates of older widows. Yet older divorced women are more than likely to be poor than older widows, and historical divorce and remarriage trends suggest that in the future a larger share of retired women will exist divorced. This article uses the Social Security Administration's Modeling Income in the Most Term (version 6) to project the retirement resources and well-beingness of divorced women. We observe that Social Security benefits and retirement incomes are projected to increase for divorced women and that their poverty rates are projected to turn down, due in big part to women's increasing lifetime earnings. Still, not all divorced women will be equally well off; economic well-being in retirement varies by Social Security do good type.
Barbara Butrica and Karen Smith are senior research associates at the Urban Institute.
This inquiry was funded past the Social Security Administration (contract no.SS00-06-60113 and lodge no.SS00-10-31234).
The findings and conclusions presented in the Message are those of the authors and practice non necessarily stand for the views of the Social Security Administration or the Urban Establish, its trustees, or funders.
Introduction
| GenX | generation X |
| MINT6 | Modeling Income in the Most Term, version 6 |
| PIA | master insurance amount |
| SIPP | Survey of Income and Plan Participation |
| SSA | Social Security Assistants |
The high poverty rates of older widows have drawn the attending of policymakers and the media, and widows accept been the focus of much of the research on older women's economic well-being (Angel, Jimenez, and Angel 2007; McGarry and Schoeni 2000; Sevak, Weir, and Willis 2003/2004; Weir and Willis 2000). However, among older women, those who are divorced accept dramatically lower incomes and higher poverty rates than widows and nigh other Social Security beneficiaries (Weaver 1997). According to recent data, around 20 pct of divorced women aged 65 or older alive in poverty, compared with 18 percent of never-married women and xv percent of widowed women. Differences in poverty rates are even larger at the oldest ages—22 percent of divorced women aged 80 or older are poor, compared with only 17 percent of never-married women and 15 percent of widowed women (SSA 2010).
Older women are much more than probable to be married or widowed than they are to be divorced or never married. Currently, only nigh 11 percent of women anile 65 or older are divorced and only 4 percentage have never married. By dissimilarity, 41 pct of women those ages are widowed (SSA 2010). Contempo trends propose that those proportions could modify in the hereafter. Divorce rates increased sharply between the 1960s and early 1970s. After falling slightly, rates leveled off in the mid-1980s; only in a historical context, they were still relatively high (Ahlburg and De Vita 1992; DaVanzo and Rahman 1993; Goldstein 1999; Norton and Miller 1992; Stevenson and Wolfers 2007). Most individuals who divorce volition remarry, but the remarriage rate has decreased, and second marriages also often end in divorce (Norton and Miller 1992).
Although the divorce rate has leveled off and may even take begun to opposite (NCHS 1991; Stevenson and Wolfers 2007; Tejada-Vera and Sutton 2010), the characteristics of divorce have been changing. In particular, the elapsing of marriages ending in divorce appears to accept declined among more recent cohorts of women. Among first marriages, the share of women who were nevertheless married at their 5th anniversary declined from 93.0 pct for those married 1960–1964 to 87.i percent for those married 1990–1994. The share of those who remained married at their tenth anniversaries declined from 82.eight percent for those married 1960–1964 to 74.5 pct for those married 1990–1994 (Kreider and Ellis 2011).
These divorce and matrimony-duration trends advise that, over fourth dimension, increasing proportions of women will be divorced when they attain retirement, which has implications for their retirement security generally and their Social Security benefits specifically. A number of studies have already documented the potential event of divorce and marriage trends on Social Security benefits for future women retirees (Butrica and Iams 2000; Harrington Meyer, Wolf, and Himes 2006; Tamborini and Whitman 2007; Tamborini, Iams, and Whitman 2009). Considering divorced retirees might receive Social Security divorced-spouse benefits, widow benefits, or neither, a divorced woman's marital status does not necessarily reflect the type of benefit she is eligible to receive (Weaver 1997); withal the type of benefit she receives will dramatically touch her economic well-being in retirement. This commodity considers how divorced women'south projected retirement incomes, Social Security benefits, and poverty rates vary past benefit type. It also updates Butrica and Iams (2000) with projections generated past an updated microsimulation model.
We notice that Social Security benefits and retirement incomes are projected to increase for futurity divorced women and that their poverty rates are projected to decline, due in large office to women's increasing lifetime earnings. But non all divorced women volition be every bit well off. In particular, divorced women who receive simply retired-worker benefits are a diverse grouping. For example, those without marriages lasting at to the lowest degree 10 years (the requirement to qualify for benefits based on an ex-husband'southward earnings history) are expected to have low retirement incomes and high poverty rates. That group is projected to stand for 1 in three divorced women in the generation 10 (GenX) cohorts (born 1966–1975). Others will have earnings histories that will authorize them for bones retired-worker benefits that are greater than 1-one-half of their ex-husbands' bones retired-worker benefits. That group is projected to correspond one in four divorced women in the GenX cohorts, and is expected to accept the highest retirement incomes and lowest poverty rates amongst all divorced women.
Social Security Benefits for Divorced Women
Depending on their circumstances, divorced Social Security beneficiaries tin can receive either retired-worker benefits, which are based on the individual'due south ain covered earnings history; auxiliary benefits, which are determined by a living or deceased erstwhile spouse's covered earnings history; or a combination of both. Thus, divorced women receive Social Security benefits either as retired workers, divorced spouses, or surviving divorced spouses. They tin as well receive widow benefits from a prior marriage that concluded in widowhood. Retired-worker benefits are computed past wage indexing annual earnings over a divorced adult female's working life, so computing her average indexed monthly earnings (AIME) to determine her chief insurance corporeality (PIA)—the do good payable at the full retirement age, which currently is 66. Divorced women with twoscore or more quarters of coverage over their piece of work lives are considered fully insured and may receive retired-worker benefits.
Auxiliary benefits are computed for each eligible previous marriage reported by a divorced adult female. Any person with a previous marriage that concluded in divorce is eligible if the ex-spouse was fully insured for Social Security benefits and the marriage lasted at least ten years. A person with a previous marriage that ended in widowhood is also eligible if the spouse was fully insured.1 Auxiliary benefits are based on the earnings history of the ex-spouse, deceased ex-spouse, or deceased spouse from each marriage. If an ex-husband is live when a adult female claims Social Security benefits on his earnings tape, the auxiliary benefit (likewise known every bit divorced-spouse benefit) is effectively equal to one-half of the ex-husband's PIA.2 If an ex-husband is deceased when a woman claims benefits, the auxiliary benefit (likewise known as a surviving-divorced-spouse benefit) is finer equal to the deceased ex-husband'southward full PIA. As well, for a wedlock that concluded in widowhood, the auxiliary benefit (also known as a widow benefit) is effectively equal to the deceased husband's full PIA.
After computing an auxiliary do good for each eligible spousal relationship, the Social Security Administration (SSA) selects the highest auxiliary benefit and compares it with the divorced woman'southward own retired-worker benefit. If she is not entitled to a retired-worker do good, she receives the full auxiliary benefit as a divorced spouse, surviving divorced spouse, or widow casher. If she is entitled to a retired-worker benefit that is less than the auxiliary benefit, she is "dually entitled" and SSA supplements her retired-worker do good with the difference between her retired-worker do good and the full auxiliary do good to which she would be entitled. Finally, if she is entitled to a retired-worker do good that exceeds the auxiliary benefit, she receives only the retired-worker benefit.
Thus, a divorced woman's Social Security retirement benefit depends not only on her own earnings history, but also to a big extent on her marital history and the earnings histories of her previous spouses. Furthermore, a divorced adult female with multiple marriages could receive an auxiliary benefit from whatever of her former spouses. Although she describes herself equally divorced, at retirement she may receive a divorced spouse benefit, surviving divorced spouse do good, or widow benefit from Social Security. In cases where none of her marriages ended in widowhood or in divorce after 10 years, a divorced adult female will be ineligible for any auxiliary benefits. This article will evidence that the type of benefit a divorced woman receives will dramatically influence her economic well-being in retirement.
Methods
We assess the retirement prospects of divorced women using the latest version of SSA's Modeling Income in the Nigh Term, version 6 (MINThalf dozen). MINTsix uses data from the 2001 and 2004 Survey of Income and Program Participation (SIPP) matched to Social Security authoritative earnings and benefit data through 2008 as the basis for its projections. For individuals born from 1926 through 1975, MINT6 projects each person'southward marital changes, bloodshed, entry to and go out from Social Security Inability Insurance rolls, and age at showtime receipt of Social Security retirement benefits.3 Information technology also projects family income including Social Security benefits, pension income, asset income, earnings, Supplemental Security Income, income from coresident household members, and imputed rental income.4 Nugget balances in retirement accounts and financial assets outside of retirement accounts in MINTsix's starting SIPP sample are adjusted to align with distributions in the 2004 Survey of Consumer Finances.five
MINT6 is ideal for this assay because it directly measures the experiences of survey respondents as of the early 2000s, thus accounting for nearly the full working careers of those built-in earlier 1946, the first half of the work lives of the baby boom accomplice, and first 3rd of the working lives of the GenX cohort. MINT6 projects their income and characteristics into the future, adjusting for expected demographic and socioeconomic changes. MINT6 also accounts for major changes in the growth of economy-wide real earnings, the distribution of earnings both between and within birth cohorts, and the composition of the retiree population. All these factors volition bear upon the retirement incomes of hereafter retirees.
We separately analyze four 10-year nascency cohorts we label war babies (born 1936–1945), leading boomers (born 1946–1955), trailing boomers (built-in 1956–1965), and GenXers (born 1966–1975).6 We analyze the characteristics, Social Security benefits, and full income of divorced women in these cohorts at age 70. We exclude divorced women who are projected to ever receive Social Security disability benefits. Considering of the legislated increase in the full retirement historic period, the increase in the delayed retirement credit, the elimination of the retirement earnings test afterwards reaching full retirement age, and changes in pension and health insurance incentives, older adults are increasingly likely to work into their tardily 60s. Given these trends, we written report total income at historic period 70 to better represent the characteristics and economical well-being of those who take really retired. We report all income projections in 2011 cost-adapted dollars.
Results
We begin by describing the projected marital status of women at age lxx to identify the prevalence of divorced women in the future. Then, we depict the projected benefit type of divorced women, accounting for changing trends in marital status and earnings of all marital partners. Those projections testify how changes in women'southward earnings impact the distribution of benefits by blazon over fourth dimension. Next, we describe the projected average monthly Social Security benefit of divorced women by benefit blazon. This is followed by a clarification of total retirement income from all major sources. Finally, nosotros describe the projected poverty status of divorced women by benefit type and accomplice.
Projected Marital Condition
Over time, the percentage of 70-year-old women who are married is projected to remain abiding; nevertheless, the composition of their nonmarried counterparts is expected to change dramatically. Amidst war infant women at age seventy, 58 percent are expected to exist married, 16 percentage divorced, 4 percent never married, and 22 percent widowed (Table 1). However, the distribution of lxx-year-old women by marital status is expected to change in later cohorts as life expectancies rise and greater percentages of older women never marry or divorce and never remarry. MINT6 projects increases in the shares who are divorced and never married, and a decline in the share who are widowed. As a upshot, hereafter cohorts of lxx-year-onetime nonmarried women are about likely to exist divorced. Amid GenX women, for example, 20 percentage are expected to be divorced at historic period 70, 13 pct widowed, and ten percentage never married.
| Marital status | War babies (1936–1945) | Leading boomers (1946–1955) | Trailing boomers (1956–1965) | GenXers (1966–1975) |
|---|---|---|---|---|
| Total | 100 | 100 | 100 | 100 |
| Divorced | sixteen | 20 | twenty | 20 |
| Never married | 4 | 6 | eight | ten |
| Widowed | 22 | fifteen | thirteen | 13 |
| Married | 58 | 58 | 59 | 57 |
| SOURCE: Authors' calculations using MINT6. | ||||
| NOTES: Sample excludes women projected ever to receive Disability Insurance benefits. | ||||
| Rounded components of per centum distributions do not necessarily sum to 100. | ||||
A adult female's marital status does non necessarily determine the type of Social Security benefit she receives. Every bit discussed above, a divorced woman could receive an auxiliary benefit from a living or deceased (ex-)husband. If none of her previous marriages ended in widowhood or in divorce after at least 10 years of marriage, even so, she is ineligible for any auxiliary benefit.
MINT6 projects that the proportion of divorced women at age 70 with any 10-year marriage will decline from 80 pct of state of war babies to 70 percent of leading boomers and GenXers (Chart 1). Consistent with other researchers (Harrington Meyer, Wolf, and Himes 2006; Tamborini and Whitman 2007; Tamborini, Iams, and Whitman 2009), we wait that over time, fewer divorced women will be eligible for auxiliary benefits based on their ex-husbands' earnings records.
Chart 1.
Projected percentage of divorced women at historic period lxx to take at least one marriage last at least x years, past birth cohort
SOURCE: Authors' calculations using MINT6.
Projected Social Security Benefit Type
Trends in shorter marriages and increases in women'south labor force participation and earnings volition bear upon the type of Social Security benefits that future cohorts of divorced women receive. Table 2 shows the projected distribution of divorced women at historic period 70 by do good blazon, and how the distribution is expected to modify over time. Among divorced women in the war baby accomplice, MINT6 projects that 64 percent volition receive only retired-worker benefits, 26 pct volition be dually entitled, 5 percent will receive only auxiliary benefits, and 5 percent will be ineligible for any Social Security benefits.
| Benefit type | War babies (1936–1945) | Leading boomers (1946–1955) | Trailing boomers (1956–1965) | GenXers (1966–1975) |
|---|---|---|---|---|
| All divorced women | 100 | 100 | 100 | 100 |
| Retired worker only | 64 | 61 | 67 | 70 |
| Dually entitled | 26 | 32 | 27 | 23 |
| Auxiliary merely | v | iii | ii | three |
| Nonbeneficiary | 5 | iv | 4 | 5 |
| Retired worker only | 100 | 100 | 100 | 100 |
| Living ex-married mana | 52 | 24 | 27 | 37 |
| Deceased (ex-)husbandb | 11 | 18 | 15 | 12 |
| No auxiliary benefitc | 37 | 58 | 58 | 51 |
| Dually entitled | 100 | 100 | 100 | 100 |
| Living ex-husbanda | 27 | fourteen | 22 | 30 |
| Deceased (ex-)hubbyb | 73 | 86 | 79 | 70 |
| Auxiliary only | 100 | 100 | 100 | 100 |
| Living ex-husbanda | 57 | 53 | 70 | 56 |
| Deceased (ex-)husbandb | 43 | 47 | 30 | 44 |
| SOURCE: Authors' calculations using MINT6. | ||||
| NOTES: Sample excludes women projected ever to receive Disability Insurance benefits. | ||||
| Rounded components of percentage distributions do not necessarily sum to 100. | ||||
| a. The highest auxiliary benefit among all eligible marriages is (or would be) based on a marriage that concluded in divorce. | ||||
| b. The highest auxiliary do good among all eligible marriages is (or would be) based on a marriage that ended either in widowhood or in divorce, with the ex-married man dying before his ex-wife received benefits. | ||||
| c. None of the previous marriages ended in widowhood or divorce after at least 10 years of union. | ||||
Betwixt the war baby and leading boomer cohorts, two sociodemographic shifts are expected to take identify. First, the share of marriages lasting at least 10 years is projected to decline dramatically (Chart 1). Consequently, for divorced women, leading boomers are less likely than war babies to be eligible for auxiliary benefits from their ex-spouses; the share of retired-worker-only beneficiaries projected to be ineligible for auxiliary benefits increases from 37 percent among war babies to 58 per centum among leading boomers. 2nd, women's labor strength participation is projected to increment between these cohorts (Blau and Kahn 2007; Goldin 2006). Equally a effect, for divorced women, leading boomers are more probable (32 percent) than war babies (26 per centum) to exist dually entitled (receiving both auxiliary and retired-worker benefits) at age 70.
Between the leading and trailing boomer cohorts, two unlike sociodemographic developments are expected. Commencement, the gap between men'south and women's earnings is projected to narrow equally women's earnings increase and men'due south earnings fall off (Blau and Kahn 2007; Goldin 2006). Second, life expectancies are projected to increase, which means that trailing boomers are less likely than leading boomers to be widowed at age seventy. As a result of those two trends, abaft boomers are more than likely than leading boomers to receive only retired-worker benefits at age 70 because their PIAdue south only take to exceed half their living ex-husbands' PIAsouth instead of their deceased (ex-)husbands' entire PIAs. Among divorced women, MINThalf-dozen projects that 61 percent of leading boomers will receive just retired-worker benefits, increasing to 67 pct of trailing boomers.
Those developments are projected to keep beyond the trailing boomer cohort. Among GenX divorced women, MINT6 projects that lxx percent will receive just retired-worker benefits at historic period 70, 23 percent volition be dually entitled, 3 per centum will receive only auxiliary benefits, and v per centum will exist ineligible for any Social Security benefits.
It is worth highlighting the MINT6 projections of the shares of divorced women who volition receive retired-worker benefits at age seventy (including the dually entitled): 90 percentage of war babies, 93 pct of leading boomers, 94 percent of trailing boomers, and 93 per centum of GenXers. The fact that over ninety pct of divorced women in all cohorts are projected to be retired-worker beneficiaries suggests that divorced women have long participated in the labor forcefulness in large numbers; only considering their earnings are expected to increase significantly over time, more are projected to receive just retired-worker benefits (and fewer will also receive auxiliary benefits).
A divorced woman's Social Security benefit tin exist based on her ex-husband's earnings alone, her deceased married man'due south or deceased ex-hubby'south earnings solitary, her own earnings alone, or a combination of earnings. Therefore, benefit amounts, full income, and poverty levels are likely to vary substantially across do good types. For example, the situation of a divorced woman receiving simply retired-worker benefits because her PIA is more than half her ex-husband's PIA will differ from that of one receiving simply retired-worker benefits because her PIA is more than than her deceased married man'south or deceased ex-husband's full PIA. For the latter adult female, the requirement for receiving only retired-worker benefits is much more difficult to satisfy because wives' earnings tend to be lower than their husbands' earnings. Despite the narrowing gap, women's earnings on average remain lower than men'southward (SSA 2011, Table four.B6). Finally, both of these women are likely to differ from a divorced woman who receives but retired-worker benefits because her quondam spousal relationship lasted less than 10 years.
Tabular array 2 as well reports, for each do good type, the projected distribution of divorced women according to the spouse whose earnings record would provide the highest auxiliary benefit (living ex-married man, deceased husband or ex-husband, no qualifying marriage).seven Among state of war babies, more than than one-half of retired-worker-merely beneficiaries will receive those benefits because their ain PIAsouth are greater than one-half of their living ex-husbands' PIAsouthward. Some other eleven percentage will receive those benefits considering their own PIAs are greater than their deceased (ex-)husbands' total PIAsouth, and 37 percent will receive just retired-worker benefits because they do non have a qualifying marriage. The composition of retired-worker-only beneficiaries is expected to change significantly over time because of changes in women'due south earnings and divorce patterns (Goldin 2006). Among GenX divorced women who are projected to receive simply retired-worker benefits, 37 percent will accept PIAsouthward that exceed one-half of their living ex-husbands' PIAsouthward, 12 percent will accept higher PIAs than their deceased (ex-)husbands, and over one-half volition not have a qualifying marriage.
Although information technology is not uncommon for divorced women to have PIAs that are greater than 1-one-half of their ex-husbands' PIAsouthward, it is less common for them to have PIAs that exceed their deceased (ex-)husbands' full PIAs. Consequently, between seventy pct and 86 pct of dually entitled beneficiaries qualify for such benefits based on the higher deceased (ex-)husbands' earnings.
In summary, divorced women are projected to rely increasingly on their own retired-worker benefits and decreasingly on auxiliary benefits based on the earnings of their ex-husbands or deceased (ex-)husbands.
Projected Social Security Benefit Levels
Table three shows how projected monthly Social Security benefit amounts differ according to benefit blazon.8 Given the mode Social Security determines do good levels, it is not surprising that average benefits for divorced women in all cohorts are projected to be highest for those whose deceased (ex-)husbands' earnings provide the highest auxiliary benefits (for dually entitled women), or would provide the highest auxiliary benefits if they were eligible (for retired-worker beneficiaries). Women in the retired-worker-only subgroup have higher PIAdue south than their deceased (ex-)husbands—an uncommon occurrence; among war babies, monthly benefits are expected to average $1,200 in 2011 dollars. Women in the dually entitled subgroup also have relatively high lifetime earnings, but their PIAs are lower than their deceased (ex-)husbands' PIAs. Every bit a issue, Social Security benefits for these women are equal to the total amount of their deceased (ex-)husbands' PIAs, unless actuarially adjusted for early or delayed retirement; among state of war babies, monthly benefits are expected to average $ane,390.
| Do good type | State of war babies (1936–1945) | Leading boomers (1946–1955) | Trailing boomers (1956–1965) | GenXers (1966–1975) |
|---|---|---|---|---|
| All divorced women | 1,100 | 1,310 | 1,370 | 1,520 |
| Retired worker only | one,150 | 1,280 | 1,380 | 1,570 |
| Living ex-husbanda | one,180 | i,250 | 1,430 | one,660 |
| Deceased (ex-)husbandb | i,200 | 1,470 | 1,530 | 1,680 |
| No auxiliary do goodc | 1,100 | one,230 | one,310 | one,480 |
| Dually entitled | ane,220 | ane,520 | one,560 | 1,610 |
| Living ex-husbanda | 770 | 960 | 950 | ane,110 |
| Deceased (ex-)husbandb | 1,390 | 1,620 | 1,730 | one,820 |
| Auxiliary simply | d | d | d | d |
| SOURCE: Authors' calculations using MINT6. | ||||
| NOTES: Sample excludes women projected ever to receive Inability Insurance benefits. | ||||
| a. The highest auxiliary do good among all eligible marriages is (or would exist) based on a marriage that ended in divorce. | ||||
| b. The highest auxiliary do good among all eligible marriages is (or would be) based on a matrimony that ended either in widowhood or in divorce, with the ex-married man dying before his ex-married woman received benefits. | ||||
| c. None of the previous marriages concluded in widowhood or divorce after at to the lowest degree 10 years of marriage. | ||||
| d. The projected sample size is too modest to provide reliable data. | ||||
By contrast, MINThalf-dozen projects that average benefits will exist everyman for divorced women at age 70 who are dually entitled because their own PIAs, although positive, are less than one-half their living ex-husbands' PIAs (for example, such benefits average $770 for war babies). Social Security benefits for these women are equal to half their ex-husbands' PIA, unless actuarially adjusted. Even retired-worker-simply beneficiaries with no qualifying marriages are expected to receive higher boilerplate monthly Social Security benefits ($1,100 among war babies). Across cohorts, the ranking of do good amount past benefit type remains unchanged, even as average amounts increase.
Boilerplate benefit amounts increase over time primarily considering women's earnings have increased, merely too because the Social Security taxable maximum earnings amount has risen, and then that higher earnings are counted when SSA calculates benefits. Additionally, MINThalf dozen assumes positive real wage growth in the time to come. Taken together, average Social Security benefits are expected to increase 38 per centum overall, from $1,100 per month for state of war babies to $1,520 per calendar month for GenXers. MINTvi projects increases over time in average Social Security benefits for all divorced women, regardless of their benefit type.
Although divorced spouse benefits are lower on boilerplate than surviving divorced spouse benefits, many divorced women will become eligible for the college benefits if their ex-husbands die. Chart two shows projected average Social Security benefits for divorced women whose highest auxiliary do good (bold they qualify for i) would come from an ex-husband who is still living. For those in the war baby cohort, boilerplate benefits are $ane,080 per month. If their ex-husbands die, their average benefits are projected to increase 22 percent to $ane,320 per month. For those in the GenX cohort, boilerplate monthly benefits are projected to increment by 25 percent if their ex-husbands dice, from $1,530 to $1,920. The transition from a divorced spouse to a surviving divorced spouse would increase benefit amounts for 54 percent of war babies, threescore pct of leading boomers, and 65 per centum of late boomers. Among GenXers, that share would drop slightly, to 61 percent.
Nautical chart ii.
Projected average monthly Social Security benefit for divorced women at age seventy earlier and afterward their ex-husbands die, and per centum of divorced women whose benefits are higher as survivors, by birth cohort
SOURCE: Authors' calculations using MINTvi.
Projected Retirement Income
Although Social Security benefits contain 90 per centum or more than of full income for nearly one-3rd of beneficiaries (SSA 2010), the bulk of retirees receive additional sources of income. Table 4 shows projected boilerplate full income for divorced women at age 70. Total income includes income from assets, earnings, imputed rent, Supplemental Security Income, Social Security benefits, and pensions.
| Do good type | War babies (1936–1945) | Leading boomers (1946–1955) | Trailing boomers (1956–1965) | GenXers (1966–1975) |
|---|---|---|---|---|
| All divorced women | 47,400 | 57,500 | 68,100 | 75,500 |
| Retired worker simply | 50,400 | 61,500 | 75,400 | 82,500 |
| Living ex-married mana | 54,100 | 73,800 | 87,400 | 104,200 |
| Deceased (ex-)married manb | 51,800 | 61,400 | 58,200 | 73,200 |
| No auxiliary benefitc | 44,800 | 56,400 | 74,300 | 68,700 |
| Dually entitled | 45,200 | 54,900 | 57,200 | 69,300 |
| Living ex-husbanda | 41,100 | 64,000 | 47,500 | 66,900 |
| Deceased (ex-)married manb | 46,700 | 53,300 | 59,900 | 70,300 |
| Auxiliary only | d | d | d | d |
| Nonbeneficiary | 17,200 | 18,600 | 17,400 | 28,300 |
| SOURCE: Authors' calculations using MINT6. | ||||
| NOTES: Sample excludes women projected ever to receive Disability Insurance benefits. | ||||
| Rounded components of percentage distributions do not necessarily sum to 100. | ||||
| a. The highest auxiliary benefit amidst all eligible marriages is (or would be) based on a marriage that ended in divorce. | ||||
| b. The highest auxiliary benefit amid all eligible marriages is (or would be) based on a marriage that concluded either in widowhood or in divorce, with the ex-hubby dying before his ex-wife received benefits. | ||||
| c. None of the previous marriages ended in widowhood or divorce after at to the lowest degree 10 years of marriage. | ||||
| d. The projected sample size is also minor to provide reliable information. | ||||
MINT6 projects that total income of all divorced women in the war infant cohort will average $47,400 at age 70; still, at that place are some striking differences by benefit type. For example, those projected to receive only retired-worker benefits at historic period 70 because their own PIAs would exceed one-half their living ex-husbands' PIAs are expected to have the highest income in all cohorts. Among war babies, their projected full income averages $54,100. By dissimilarity, nonbeneficiaries are expected to have the lowest income in all cohorts. Among war babies, their projected total income averages only $17,200. Interestingly, projected incomes for beneficiaries are very similar across do good types in the war baby accomplice; they range from $41,100 for dually entitled beneficiaries whose living ex-husbands' earnings records provide the highest auxiliary benefit to $54,100 for retired-worker-only beneficiaries whose living ex-husbands' records would take provided the highest auxiliary benefit had these women been eligible.
Between the state of war infant and GenX cohorts, full income for all divorced women is projected to increase 59 percent, from $47,400 to $75,500. MINT6 projects that retired-worker-only beneficiaries whose living ex-husbands would have provided the highest auxiliary benefit will experience the largest increases in total income—from $54,100 among war babies to $104,200 among GenXers. Furthermore, projected incomes by benefit type vary much more for GenXers than for state of war babies.
Poverty Rates
Table 5 shows the projected poverty rates of divorced women by benefit blazon and birth cohort. As with the Census Bureau's official poverty measure out, our measure of income for determining poverty excludes imputed rental income and includes income from coresident family members. Amongst state of war babies, xiv percent of all divorced women are projected to be poor at age lxx. In all cohorts, projected poverty rates are highest for those ineligible for Social Security benefits and everyman for dually entitled beneficiaries whose deceased (ex-)husbands provide the highest auxiliary do good. In the war babe cohort, nearly two-thirds of nonbeneficiaries are expected to be poor, compared with just ii per centum of dually entitled widow and surviving divorced-spouse beneficiaries.
| Do good type | War babies (1936–1945) | Leading boomers (1946–1955) | Abaft boomers (1956–1965) | GenXers (1966–1975) |
|---|---|---|---|---|
| All divorced women | 14 | eleven | 9 | 7 |
| Retired worker only | 13 | 12 | viii | 4 |
| Living ex-husbanda | 10 | 8 | 5 | 2 |
| Deceased (ex-)husbandb | 16 | 11 | 7 | 3 |
| No auxiliary benefitc | 17 | 14 | 9 | 7 |
| Dually entitled | 6 | 3 | 4 | 4 |
| Living ex-husbanda | 16 | xi | 11 | ten |
| Deceased (ex-)husbandb | ii | 2 | 2 | two |
| Auxiliary only | d | d | d | d |
| Nonbeneficiary | 63 | 57 | 66 | 44 |
| SOURCE: Authors' calculations using MINT6. | ||||
| NOTES: Sample excludes women projected ever to receive Disability Insurance benefits. | ||||
| a. The highest auxiliary benefit amongst all eligible marriages is (or would be) based on a matrimony that ended in divorce. | ||||
| b. The highest auxiliary benefit among all eligible marriages is (or would be) based on a marriage that ended either in widowhood or in divorce, with the ex-married man dying before his ex-wife received benefits. | ||||
| c. None of the previous marriages concluded in widowhood or divorce later at least 10 years of spousal relationship. | ||||
| d. The projected sample size is too pocket-size to provide reliable data. | ||||
Overall poverty rates are projected to refuse past one-half beyond cohorts—from 14 percent for the state of war baby cohort to 7 percent for the GenX cohort. At least part of the projected decline in poverty rates is due to assumed positive real wage growth in the futurity. Most of the decline, notwithstanding, tin can be explained by celebrated gains in women's labor force participation and earnings. MINT6 projects that poverty rates for about all divorced women will pass up over time.9 All the same, in the GenX cohort, 44 percent of nonbeneficiaries, 10 percent of dually entitled divorced-spouse beneficiaries, and 7 percent of retired-worker-but beneficiaries without qualifying marriages are projected to exist poor at historic period 70.
Conclusions
Historically, divorced women have had the highest poverty rates among all aged women in the The states. Higher divorce rates mean that a larger share of future seniors will enter retirement divorced. Absent other changes, this trend could increment poverty rates for future seniors. However, of import sociodemographic changes volition positively bear upon the economic well-being of future cohorts of divorced women. Our microsimulation results show that the historic increases in female labor strength participation and earnings are probable to increment future incomes and reduce future poverty rates for older divorced women.
A key finding of this article is that non all divorced retiree women are the same. Social Security auxiliary benefits to divorced women with qualifying marriages are determined using unlike criteria depending on whether the ex-husband is dead or live. All else equal, divorced women with qualifying marriages stand to ameliorate their economic circumstances when their former spouses die because Social Security benefits are more generous when based on the earnings records of deceased ex-spouses than on those of living ex-spouses.
Divorced women who receive only retired-worker benefits at age 70 have the highest average total income because of their strong labor force zipper and earnings histories. Over fourth dimension, they have increasingly accumulated more pensions, savings, and greater Social Security benefits based on their ain work records. Every bit these retired-worker-only beneficiaries become a growing share of divorced women in the hereafter, they will drive the gains in income growth amidst divorced women.
Divorced women who remain at loftier risk of poverty in quondam age include nonbeneficiaries and those receiving only auxiliary benefits. Those women have very little attachment to the labor forcefulness and accumulate no Social Security benefits on their ain earnings. Policy options such as caregiver credits that recognize women'due south care giving role in supporting children could boost retirement incomes for many of those vulnerable women (Favreault 2010). Such options could prove peculiarly important for divorced women whose child-rearing responsibilities proceed or increase after divorce and who receive no spousal income support. Policies that help single mothers enter or remain in the labor force tin also help heave family incomes both before and after retirement.
Notes
i Widow(er)s must have been married for at to the lowest degree ix months to be eligible for widow(er) benefits. However, the ix-month requirement is waived nether certain circumstances, such as for a woman who could reasonably expect the marriage to last at to the lowest degree 9 months at the outset and whose married man'due south death was accidental.
2 We say "effectively" because Social Security benefits are reduced for early claiming and increased for delayed challenge.
3 MINThalf-dozen also projects outcomes for individuals born from 1976 through 2070 using a somewhat unlike approach from that used for the cadre cohorts born from 1926 through 1975. However, this assay is simply concerned with individuals built-in from 1936 through 1975.
4 Nosotros annuitize assets in MINT6 to stand for the potential, rather than actual, income from assets since nigh retirees do not convert their financial avails into annuities. MINT6 takes the stock of wealth in nonpension, nonhousing assets and retirement accounts and (1) annually decays it based on age-wealth patterns in the SIPP to represent the spend-downwards of assets over retirement; and (2) converts avails into income by calculating the annuity a couple or individuals could buy if they annuitized 80 pct of their total wealth. Thus, asset income is derived from a series of annuity estimates based on a failing stock of wealth in retirement. Also, we calculate imputed rental income as a 3-percent real rate of return on domicile equity.
v For more detailed information well-nigh the MINT model, meet Smith and others (2010), Smith and others (2007), and Smith, Cashin, and Favreault (2005). Farther sources of information are bachelor at http://www.socialsecurity.gov/policy/virtually/mint.html.
6 The baby smash cohort is typically represented as those born between 1946 through 1964. For analytical purposes, however, we ascertain the babe nail cohort every bit those born betwixt 1946 and 1965.
7 By definition, retired-worker-simply beneficiaries do not receive auxiliary benefits. However, we show results for retired-worker-only beneficiaries by the spouse who would provide the highest auxiliary benefit if the divorced adult female were eligible.
8 The projected sample size for auxiliary-only beneficiaries is too small to provide reliable information.
nine The merely exceptions are dually entitled divorced women whose deceased (ex-)husbands provide the highest auxiliary benefit (their projected poverty rates remain at 2 percent across all cohorts) and auxiliary beneficiaries.
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