Retirement Security: Trends in Marriage and Work Patterns May Increase Economic Vulnerability for Some Retirees
Published: 2014-01-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Marriage has historically helped protect the financial health of couples and surviving spouses in old age. Based on their marriage, and independent of their own work history, spouses may receive retirement and survivor income through Social Security and some employer-sponsored pension plans. Many of the federal requirements governing these benefits were developed at a time when family structures, work patterns, and pensions were very different from what they are today. In recent decades, marriage has become less common, more households have two earners rather than one, and many employers have shifted from DB plans to DC plans. In light of these trends, GAO was asked to examine the issue of marriage and retirement security. Specifically, GAO examined: (1) the trends in and status of marriage and labor force participation in American households, (2) how those trends have affected spousal benefits and retirement savings behavior within households today, and (3) the implications of these trends for future retirement security. GAO analyzed nationally representative survey data including the Survey of Consumer Finances, the Survey of Income and Program Participation, and the Current Population Survey (CPS); conducted a broad literature review; and interviewed agency officials and a range of experts in the area of retirement security.
GAO is making no recommendations. GAO received technical comments on a draft of this report from the Department of Labor and the Department of the Treasury, and incorporated them, as appropriate.
section_title: What GAO Found
paragraphs: Over the last 50 years, the composition and work patterns of the American household have changed dramatically. During this period, the proportion of unmarried and never-married individuals in the population increased steadily as couples chose to marry at later ages and live together prior to marriage. At the same time, the proportion of single-parent households more than doubled. These trends were more pronounced for individuals with lower levels of income and education and for certain racial and ethnic groups. 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 Social Security benefits based purely on their spouse's (or deceased spouse's) work record declined from 56 to 25. At the same time, the percentage of women receiving benefits based purely on their own work records rose from 39 to 48. 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 Social Security and private employer-sponsored pension plans, increasing vulnerabilities for some. 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. For private plans, the shift from defined benefit (DB) to defined contribution (DC) 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.

section_title: Letter
paragraphs: Historically, the institution of marriage has served to help protect the  financial health of couples, especially couples and surviving spouses in  old age. Indeed, based on their marriage, spouses may receive  retirement and survivor income from Social Security and some employer- sponsored pension plans. More specifically, Social Security retirement  benefits—the most common type of retirement income—are available to  individuals who are spouses, widows/widowers, and in some cases  former spouses, of workers who qualify for Social Security retirement  benefits based on their work history. In addition, private sector defined  benefit (DB) plans are required by federal law to include a survivor’s  benefit for spouses.
However, many of the policies governing spousal retirement benefits  were developed at a time when family structures, labor force participation  patterns, and retirement plans were very different than they are today. In  recent decades, marriage has become less common, and for those who  do marry, it is common for both spouses to work. Further, private sector  employers have shifted away from DB plans to defined contribution (DC)  plans, which generally confer fewer benefits for spouses.
Given these trends, the Senate Special Committee on Aging requested  that GAO examine the issue of marriage and retirement security.  Specifically, we examined (1) the trends in and status of marriage and  labor force participation in American households, (2) how those trends  have affected spousal benefits and retirement savings behavior within  households today, and (3) the implications of these trends for future  retirement security.
To address these questions, we analyzed several nationally- representative datasets, conducted an extensive literature review, and  consulted with a wide range of experts. Specifically, to understand trends  in family structure and work patterns, we analyzed data from the 1996  and 2008 panels of the Survey of Income and Program Participation  (SIPP); the Integrated Public Use Microdata Series (IPUMS); and recent  U.S. Census Bureau (Census) and Bureau of Labor Statistics (BLS)  publications, which report on analyses of nationally-representative  datasets such as the Current Population Survey (CPS). To determine the  characteristics of the population receiving Social Security spousal  benefits, we analyzed the 2008 restricted-use version of the SIPP data— known as the “Gold Standard” file—SIPP data that have been matched to  administrative data on earnings and benefits from the Social Security  Administration (SSA).receiving spousal benefits through pensions, we used the 2010 version of  the Survey of Consumer Finances (SCF), conducted by the Board of  Governors of the Federal Reserve System (Federal Reserve). We also  used the 2010 SCF to analyze retirement savings behavior among  working-age households. To project the distribution of Social Security  beneficiary types for women into the future, officials from the Office of  Retirement Policy at SSA provided GAO with projections based on   To determine the characteristics of the population  simulations they conducted with the Modeling Income in the Near Term  model, Version 6 (MINT6). We conducted data reliability assessments of  selected IPUMS, SIPP, SCF, and MINT6 data by conducting electronic  data tests for completeness and accuracy, reviewing documentation on  the dataset, or interviewing knowledgeable officials about how the data  are collected and maintained and their appropriate uses. For the  purposes of our analysis, we found the variables that we ultimately  reported on to be sufficiently reliable. Lastly, to deepen our  understanding of our data analyses and to understand the implications of  demographic trends for retirement security, we conducted an extensive  literature review and interviewed 49 experts from federal agencies,  academia, advocacy groups, think tanks, and industry. We identified and  interviewed experts who have specialized knowledge about spousal  protections and retirement security in a specific area (e.g., law or social  science), or who were recommended by one or more people or groups  we had previously interviewed.
We conducted this performance audit from September 2012 through  January 2014 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence we obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Financial Benefits of Marriage
paragraphs: A number of financial benefits associated with the institution of marriage  relate to the ability of a couple to pool resources, specialize, and share  risk. Specifically, married people can pool resources and share costs of  household goods and services, which reduces the overall cost of items  that do not need to be purchased individually and frees up resources for  other types of investments. In addition, within married couples, even  those in which both are working, each member can specialize in certain  tasks, such as managing household finances. The financial benefits of  marriage can carry over into retirement as couples continue to pool  resources and assist each other as the risks of disability and deteriorating  health increase.
Conversely, several factors contribute to the economic vulnerability of  single retirees. First, single retirees living alone do not benefit from  sharing the cost of living expenses and caregiving. According to the  Census Bureau’s poverty measures, a single person age 65 or older  needs 79 percent of the income of a two-person household. Moreover,  unmarried individuals are more vulnerable to economic shocks, such as  job loss, than their married counterparts. The unmarried, especially single  parents, also tend to have fewer resources available to save for  retirement during their working years. For example, a 2009 study shows  that among all women age 35-54, never-married women with children had  the lowest level of pension plan participation among all family types.  Taken together, these factors are likely to contribute to the higher poverty  rates observed among unmarried individuals age 65 or older   (see fig. 1).
Federal law also confers a number of benefits and protections for married  spouses or former spouses.income, spouses or former spouses may receive retirement and survivor  income based exclusively on marriage, independent of their own work  history. This report focuses on four main sources of retirement income:  (1) Social Security retirement benefits, (2) defined benefit (DB) plans, (3)  defined contribution (DC) plans, and (4) individual retirement accounts   In the case of certain types of retirement  (IRA).provides varying types and levels of protections to spouses of workers  who are eligible for Social Security, participate in an employer sponsored  DB or DC plan, or own an IRA. Examples of these requirements are  summarized in table 1 and described in greater detail below.
section_title: Same-Sex Marriages
paragraphs: See Michael J. Brien and Constantijn W.A. Panis, Annuities in the Context of Defined  Contribution Plans, a study prepared for the U.S. Department of Labor, November 2011.  In some limited circumstances, DC plans may be required to offer a QJSA or QPSA. 29  U.S.C. § 1055(b)(1)(B)-(C). ruling, regulation, or interpretation by federal bureaus and agencies. As  a result of DOMA, enacted in 1996, same-sex couples married under  state law were not covered by some of the federal requirements  described above; for example, sponsors of private-sector pensions  regulated by ERISA were not required to offer survivor benefits to same- sex spouses. At the time of this report’s issuance, the Executive Branch  had issued some guidance and was in the process of determining what  additional guidance to issue, or other actions to take, in response to the  U.S. Supreme Court ruling.
section_title: State of the U.S. Retirement System and Economy
paragraphs: Today, working-age households face a host of challenges in saving for  retirement. First, less than half (46 percent) of all workers age 16 and  older participated in some form of employment-based pension plan in  2012, raising concerns about the adequacy of retirement savings  among future retirees. Second, employers have been moving from DB to  DC plans. Further, many of the remaining DB plans now offer lump sums  as one of the form-of-payment options under the plan; participants who  elect a lump sum do so in lieu of a lifetime annuity. Some DB plan  sponsors have also begun offering special, one-time lump sum elections  to participants who are already retired and receiving monthly pension  benefits; participants who accept such offers give up their lifetime  annuity. As a result of all of these trends and actions, those who do  participate in an employer-sponsored plan have increasing responsibility  to manage their pensions and other financial assets so that they have a  sufficiently adequate income throughout retirement. However, recent  research suggests that as life expectancy continues to increase, many  Americans—including baby boomers, who are beginning to retire in  greater numbers—may outlive their retirement assets.
The trends in the U.S. economy overall have exacerbated the challenges  households face in saving for retirement. The 2007-2009 recession  resulted in major stock indices falling dramatically, reducing retirement  savings at a critical time for those in or near retirement. Further, the  recession led to higher rates of unemployment among older workers.  Prior GAO work has shown that long-term unemployment can reduce an  older worker’s future retirement income in numerous ways, including  reducing the number of years the worker can accumulate savings,  prompting workers to claim Social Security retirement benefits early, and  leading workers to draw down retirement savings to pay for living  expenses during unemployment.
section_title: The Composition and Work Patterns of the Family Have Changed Dramatically in the Past 50 Years
subsections: section_title: As Marriage Has Declined, Cohabitation and Single Parenthood Have Increased
paragraphs: Since 1960, marriage rates in the United States have been declining.  From 1960 through 2010, the proportion of the population age 15 and  above that is married declined from 68 to 54 percent (see fig. 2). Over the  same period, the proportion of divorced individuals increased from 2 to 10  percent, and the proportion of individuals who were never married  climbed from 22 to 31 percent.a particular point in time. Therefore, those who were unmarried at one  point in time might marry at a later point in time and vice versa. One  reason for the rising proportion of the never-married is that many people  have begun getting married later in life. According to the Census Bureau,  from 1960 through 2011, the median age of first marriage increased from  an estimated 20 to 27 for women and 23 to 29 for men.
section_title: The Decline in Marriage Is More Pronounced for Certain Demographic Groups
paragraphs: The decline in marriage has been more pronounced for certain racial and  ethnic groups as well as income and education levels. Among racial and  ethnic groups, blacks have experienced the greatest decline in marriage  (see fig. 5). From 1960 through 2010, the percentage of married black  men fell from 61 to 39 and the percentage of married black women fell  from 60 to 33. Differences in marriage rates between blacks and other  racial and ethnic categories persisted even after accounting for  differences in income and education levels, and controlling for age.  Asians were the only group, among these racial and ethnic groups, to  experience an uptick in marriage since 2000.
Since the 1970s, the percentage of single-parent families has increased  dramatically (see fig. 6). Specifically, from 1970 through 2012 (and from  1980 through 2012 in the case of Hispanics), the percentage of single- parent families climbed for every race and ethnicity category depicted in  the figure, with the highest growth among whites (an increase of 17  percentage points, for a 170 percent increase in the percentage).  However, over the entire period, the rate of single parenthood was  highest among black families and continues to be more than double the  rate of white families.
The decline in marriage and rise in single parenthood over this period  were also more pronounced among low-income and less-educated  populations. Over the period from 1960 through 2010 the percentage of  married, 45- to 54-year-olds in the highest income quintile declined  slightly for men (see fig. 7). In contrast, over the same period, the  percentage of married, 45- to 54-year-old men and women in the lowest  income quintile declined markedly.
Similarly, the percentage of single parents among 45- to 54-year-old men  and women in the highest income quintile remained flat, while there was a  steep rise in the percentage of single parents in the lowest income  quintile during this timeframe. For education, among individuals age 18  years and older, the decline in the percentage of married individuals was  steeper for those with less than a high school diploma than for those with  4 or more years of college. Conversely, the rise in single parenthood was  steeper for women and men without a high school diploma in comparison  to their counterparts with 4 or more years of college (see fig. 8).  Nonetheless, the rate of single parenthood among college-educated  women was greater than that of men with less than a high school diploma  for most of the period, reflecting the higher rate of single parenthood  among women overall.
section_title: Married Women Are Participating in the Labor Force at Higher Rates and Are Taking Less Time Off for Caregiving
paragraphs: Labor force participation among married and single men and women  changed substantially over the past 50 years (see fig. 9). In 1960, labor  force participation rates among the four groups (married men, single men,  married women, and single women) ranged from 89 percent for married  men to 32 percent for married women. The variation in workforce  participation rates between single men (70 percent) and single women  (59 percent) was not as wide, but was still substantial. Since then, the  differences in labor force participation rates for these four groups have  narrowed. In 2010, the rate was 76 percent for married men, 67 percent  for single men, 63 percent for single women, and 61 percent for married  women. However, as figure 9 shows, the labor force participation rates of  married women have leveled off since the mid-nineties, and have  declined for single women, single men, and married men over the last  decade.
Labor force participation rates for women with children followed a similar  trajectory to those of married women. From 1975 through 2010, labor  force participation rates for women with children under age 3 grew from  34 to 61 percent (see fig. 10). For women with children under age 6, the  rate grew from 39 to 64 percent. As in the case of married women, labor  force participation rates for each of these groups have remained relatively  level since the mid-1990s.
As a result of married women’s increasing labor force participation, the  proportion of married couples with two earners has risen—along with the  wives’ contributions to household income. The proportion of households  in which both the husband and wife contributed to their household’s  income rose from 44 percent in 1967 to 60 percent in 1994 (see fig. 11).  The proportion remained at 60 percent through 2000, after which it  declined to 54 percent by 2010. Part of this is likely explained by the  stagnation in married women’s labor force participation rates over that  period, but part of this also may be due to the rise in the percentage of  married households in which only the wife works. Since 1967, the  proportion of married households in which the wife was the sole earner  rose more than threefold—from 2 to 7 percent. At the same time, the  proportion of married households in which the husband was the sole  earner declined from 36 to 19 percent. Women’s contributions to family  income also grew steadily over this period. According to the Bureau of  Labor Statistics, from 1970 through 2010, women’s median contribution to  household income rose from 27 to 38 percent. Further, from 1987 through  2010, the percentage of households in which the wives’ earnings  exceeded their husband’s rose from 24 to 38 percent.
As working women’s contributions to household income have grown,  women have also tended to take less time out of the workforce to raise  children. Since the 1960s, working women have left the workforce for  progressively shorter intervals to care for their first born children. For  children born in the late 1960s, 36 percent of working mothers took 4  years or more off to care for their first born and 56 percent took less than  6 months off (see fig. 12). For children born from 2000 through 2004, 14  percent of working women took 4 years or more off and 65 percent took  less than 6 months off.
It is also noteworthy that the women represented in figure 12—those who  were working prior to the birth of their first child—comprised a growing  proportion of new mothers over this period, according to analysis by the  Census Bureau. Specifically, an estimated 60 percent of women who had  their first child between 1960 and 1965 had worked for at least 6 months  or more continuously prior to having children. In contrast, an estimated 75  percent of women who had their first child between 2000 and 2005 had  worked for 6 or more months continuously prior to childbirth.
section_title: Trends in Marriage and Work Patterns Have Resulted in Fewer Women Receiving Social Security Spousal Benefits and Married Women Contributing More to Household Savings
subsections: section_title: Fewer Women Are Receiving Social Security Spousal Benefits
paragraphs: Fewer women are receiving Social Security spousal benefits today than in  the past. In 1960, nearly one-third of all women over age 62 received  spousal benefits based exclusively on their spouse’s work record,  according to SSA data (see fig. 13). In 2011, 9 percent of women  received them. Similarly, the proportion of women over age 62 receiving  widow (i.e., survivor) benefits based exclusively on their spouse’s work  record declined from 23 to 16 percent over the same period. At the same  time, as women’s workforce participation and earnings have risen, the  percentage of women receiving benefits based solely on their own work  record increased from about 39 to 48 percent. However, women’s  average Social Security retired worker benefit is approximately three- quarters of men’s average retired worker benefit due to women’s lower  median lifetime earnings relative to men’s. Specifically, according to SSA,  in 2012, the average retired worker benefit was $1,417 per month for men  and $1,103 per month for women.
In addition to the effect of rising labor force participation, the decline in  women’s receipt of spousal benefits is partly due to the decline in  marriage. Specifically, the proportion of women who are not eligible to  receive Social Security spousal benefits because they were either never  married, or divorced after less than 10 years of marriage—the length of  time required for eligibility for Social Security divorced spouse benefits— has increased over the last two decades. According to analysis by SSA  researchers, among women age 50-59, the percentage who were not  eligible to receive Social Security spouse or widow benefits based on  marital history doubled from 8 to 16 percent from 1990 to 2009 (see fig.  14). However, this growth varied greatly by race. For blacks, the rise in  ineligibility for spousal or widow benefits has been more dramatic,  growing from 13 to 34 percent from 1990 to 2009.whites and Hispanics, the rates of ineligibility grew less—by 8 and 6  percentage points, respectively.
section_title: Married Women’s Contributions to Household Account-Based Retirement Savings Approach Men’s in Dual- Earner Households
paragraphs: With women’s rising workforce participation and earnings, married women  are contributing more to household account-based retirement savings, but  their share of contributions varies with the work patterns of the household.  Between 1992 and 2010, married women’s contributions to household  account-based retirement savings (accumulated in DC plans, IRAs, and  Keoghs) increased from 20 to 38 percent, on average, according to our  analysis of SCF data. However, the proportion of households with any  retirement savings and the average proportion of the wives’ contributions  varied depending on whether the husband, wife, or both were working. In  2010, dual-earner households were the most common type of households  among 55- to 64-year-olds, comprising 45 percent of married households  for that age group that year (see fig. 16). These households were more  likely to have account-based retirement savings than households with  only one spouse working. Further, among dual-earner households with  account-based retirement savings (either in DC plans, IRAs, our Keoghs),  wives contributed 44 percent of the household’s account-based  retirement savings, on average. For households with some account- based retirement savings in which wives were the sole earners, wives  contributed 68 percent of the household’s account-based retirement  savings. In contrast, wives contributed much lower shares of retirement  savings—14 percent, on average—in households in which the husband  was the sole earner.
Single-headed households, in contrast, continue to lag behind their  married counterparts both in terms of having DC plans or IRAs and in the  level of retirement savings. For the population of all households age 50- 64, 60 percent have some DC, IRA, or Keogh savings, according to our  analysis of SCF data. However, this varies widely by marital status.  Specifically, in 2010, an estimated 71 percent of married households age  50-64 years old had DC, IRA, and Keogh savings, while only 39 percent  and 48 percent of male and female single-headed households had  retirement savings, respectively (see fig. 17).levels of savings among single-headed households were much lower than  for married households in this age category in 2010. For married  households with retirement savings, the median savings level was  $122,560. In contrast, among single men with retirement savings, the  median savings level was $50,000. Among single women with retirement  savings, the median level of savings was $32,800.
section_title: Over One-Third of Married Households Receiving Income from Pensions Opted Not to Receive a Survivor Benefit
paragraphs: Over the last decade, over one-third of married households receiving  income from pensions opted not to receive a spousal survivor benefit.  There are many reasons why households might decide to opt out of  receiving a survivor benefit. For example, a spouse might not be  expected to outlive the individual receiving the pension (the participant).  Alternatively, the spouse that is expected to survive the spouse receiving  the pension might have access to his or her own retirement income.  According to our analyses of SCF data, the decision to opt out differed  depending on whether the pension participant was the wife or the  husband. Specifically, in 2010, 62 percent of men opted for a survivor  benefit for their spouse while 38 percent of women did. Men’s higher  likelihood of choosing survivor benefits could reflect their expectations  that their wives are more likely to outlive them, or it could reflect that  married women are more likely than married men to need the security of  a survivor benefit because of less access to other sources of retirement  income.
Several other factors were related to couples’ likelihood of opting out of a  survivor benefit. Couples with longer marriages were less likely to opt out,  possibly reflecting a greater sense of financial responsibility for the  surviving spouse among long-lasting marriages. Households in the lowest  net worth quintile are more likely to opt out of the survivor benefit than  wealthier households. This finding may reflect the fact that households  with limited wealth may be unable to afford the benefit reduction that  comes with a survivor benefit. Lastly, households with higher levels of  assets in DC plans or IRAs were less likely to opt out, perhaps an  indicator of the household’s level of financial literacy and preparedness  overall or simply that, with other retirement savings, the household did not  need the higher benefit payment that would result from the couple opting  out.
section_title: The Decline in Receipt of Spousal Benefits Is Likely to Increase Some Retirees’ Economic Vulnerability
subsections: section_title: Shifts in Marriage and Labor Force Participation Mean Fewer Future Retirees Are Expected to Receive Social Security Spousal Benefits
paragraphs: Looking forward, fewer women will likely receive Social Security spousal  benefits because of their declining eligibility based on marital history or  increased earnings relative to their husbands, according to SSA   projections. More specifically, eligibility for spousal benefits is projected  to decline for two reasons. First, the population of women who never  marry is projected to more than double in the future. Of women born from  1936 to 1945, 4 percent are projected to never have married by age 70.  In contrast, of women born from 1966 to 1975, 10 percent are projected  to have never married by age 70. Second, due to the trend toward  shorter marriages, fewer elderly divorcees will likely have had a marriage  that lasted at least 10 years—an eligibility requirement for divorced  spousal benefits. For women who had their first marriage in the early  1960’s, 83 percent of marriages lasted at least 10 years, whereas 75  percent of comparable marriages that occurred in the early 1990’s lasted  this long, according to Census Bureau estimates.
Additionally, due to women’s increased lifetime earnings relative to men,  fewer women who are eligible for spousal benefits based on their marital  history will receive them because they will be eligible for retired worker  benefits based on their own work record. Compared to current retirees,  more of today’s working-age women are likely to receive Social Security  benefits based exclusively on their own work history, known as retired  worker benefits. Whereas in 1960, 39 percent of women age 62 and older  received retired worker benefits, SSA projects that this will increase from  46 percent in 2012 to 62 percent in 2040 (see fig. 18). This increase will  largely be driven by the employment and earnings patterns of married  and widowed women. Over the same period, the proportion of women  who are expected to receive benefits based exclusively on marriage— known as spouse-only benefits—is projected to decline from 8 to 2   At the same time, the proportion of women who are expected  percent.to receive benefits based on both work history and marriage—known as  dually-entitled/spouse benefits—is projected to decrease from 15 to 8  percent. In contrast with today, proportionately more married men are  projected to receive survivor benefits in the future due to their decreased  earnings relative to their wives. SSA projects that the proportion of men  who will receive retired worker benefits will drop by 3 percentage points— from 95 to 92 percent—between 2012 and 2040. At the same time, the  proportion of men who are expected to receive survivor benefits based on  their marriage to higher-earning wives is projected to increase from 3 to 6  percent (see fig. 18).
Despite these changes, survivor benefits are expected to continue to play  an important role for many women. Although the proportion of widows  whose benefits will be based solely on marriage—known as widow-only— is projected to decrease from 6 to 2 percent by 2040, SSA projects that  the proportion of women who will be dually-entitled widows will remain  stable at about one-quarter of all female beneficiaries through 2040 (see  fig. 18). This is in part due to the fact that many women who qualify for  retired-worker benefits while their husbands are alive (because their  retired-worker benefit exceeds 50 percent of their spouse’s benefit) will  become dually-entitled as widows because their own retired-worker  benefit does not exceed 100 percent of their husband’s benefit. For  example, another analysis projects that two-thirds of wives born from  1966 to 1975 will receive widow benefits rather than their own retired  worker benefit when widowed, reflecting women’s lower average lifetime  earnings relative to their husbands.
In general, the trend away from women receiving spousal benefits is  projected to occur across racial and ethnic groups, with the largest shift  occurring among black women. According to SSA analyses among  whites, blacks, and Hispanics, as of 2012, proportionally, black women  were already the most likely to receive retired worker benefits (see fig.  19). Furthermore, between 2012 and 2040, black women are projected to  experience the highest growth in this category. In addition, the  proportions of dually-entitled/spouse white and black women are  projected to decrease by about half between 2012 and 2040, with a small  decrease among Hispanic women. Moreover, the proportion of women  who are expected to receive widow-only benefits is projected to decrease  for all three groups and, by 2040, differ by no more than two percentage  points. Unlike these trends, the projections for dually-entitled widows  diverge by race. More specifically, the proportion of white dually-entitled  widows is projected to increase by 12 percent, while blacks will likely see  a 35 percent decrease. These projections do not suggest any change  among Hispanic dually-entitled widows.
section_title: Current Trends Suggest a Growing Proportion of the Elderly Will Be at Risk of Living in Poverty During Retirement
paragraphs: As the population that is ineligible for spousal and survivor benefits based  on marital history—i.e., those who are not married or divorced without a  marriage of at least 10 years—is projected to increase, the proportion of  people who will depend entirely on their own earnings and savings in  retirement is expected to increase as well. For many elderly, women in  particular, this shift is likely to be positive, reflecting their higher earnings  and greater capacity to save for retirement. However, elderly with low  levels of lifetime earnings, who have no spouse, or who do not receive a  spousal benefit—a group that is disproportionately represented by black  women—are expected to have correspondingly lower retirement  benefits. As a result, a growing proportion of the elderly—especially  black women—may be at risk of living in poverty in retirement due to the  higher cost of living and lower income associated with being single. As  our past work has shown, elderly married individuals have higher levels of  median household income and lower poverty rates than those who are  never married, divorced, or widowed.income levels of this expanding group of never married elderly will  continue to be lower than that of their married counterparts, according to  SSA projections.
The preretirement income used in this example is the annual equivalent of the average  indexed monthly earnings used to calculate Social Security benefits. relative to what a couple needs. Moreover, the proportion of dual-earner  wives who are projected to not receive a survivor benefit—because of  their relatively high earnings compared to their deceased husbands’—is  expected to increase from 18 percent of wives who were born from 1936  to 1945 to 34 percent for wives born from 1966 to 1975.of survivor benefits generally may affect women for a longer period of  time than men, due to women’s longer life expectancy. However, working  women’s increased earnings and personal savings may potentially offset  the lower level of survivor benefit, mitigating this issue to some extent.
section_title: Some Social Security Policy Options May Offset Effects of Changes in Marital Patterns
paragraphs: Past GAO work has identified a number of options suggested by experts  to improve the retirement security of populations vulnerable to poverty by  changing the Social Security eligibility rules or benefit structure, although  each option has limitations. Some of these options focus specifically on  modifying benefits for spouses and survivors, while others would affect  broader populations of vulnerable individuals, and may also benefit those  affected by changing marital patterns. For example, one option would  change the eligibility requirements for divorced spousal benefits by  reducing the required length of marriage from 10 to 7 years, with the goal  of helping more of the divorced elderly remain out of poverty. Another  option would increase benefit amounts for widow(er)s from the current  maximum of 67 to 75 percent of the combined amount the couple had   This  received, with the aim of preventing poverty among widow(er)s.option could be targeted specifically toward low-income survivors by  capping the surviving spouse’s benefit amount at the average retired  worker benefit. However, concerns have been raised that these options  may not effectively target other economically vulnerable groups like low- income Social Security retired worker recipients who never married.  Further, both of these options could provide benefits to higher-income  elderly who may not be particularly economically vulnerable.
Other reform options target the vulnerable population of low-income  people who do not qualify for spousal or survivor benefits, such as those  who never marry, and who would otherwise receive retired worker  benefits. Retired worker benefits are generally calculated on the basis of  a worker’s average indexed monthly earnings for the worker’s highest 35  years of earnings. While Social Security’s benefit structure is progressive,  meaning that its retirement benefits replace a higher percentage of  earnings for lower-income workers, a lifetime low-wage worker would still  have correspondingly low benefits. Furthermore, the current benefit  formula does not distinguish between low average wages caused by low  lifetime earnings or low average wages caused by years of  unemployment. One set of proposed options aims to increase benefit  adequacy for lifetime low wage workers by increasing the level of the  Special Minimum Primary Insurance Amount (also referred to as the  “Special Minimum Benefit”)—a minimum Social Security benefit that is  based on the number of years a worker has spent in Social Security- covered employment. The Special Minimum Benefit is paid to an eligible  retired worker if it is higher than the benefit amount computed using the  typical Social Security benefit formula based on the worker’s highest 35  years of earnings. Increasing the Special Minimum Benefit could help  more elderly avoid poverty. However, it is difficult to effectively target  lifetime low earners with this option because it is possible for high-wage  earners who work part-time or sporadically to accumulate 11 years of  covered employment—the minimum required under current law to qualify  for the Special Minimum Benefit.
In addition to revising the Special Minimum Benefit, another option targets  those who have shorter periods of covered employment because they  were providing care to a family member and do not qualify for spousal  benefits. More specifically, this option could change the Social Security  benefit structure to provide earnings credits to caregivers (known as  caregiver credits) during years in which they do not have earnings  because they were providing care to children or elderly relatives.  However, according to experts, this option may not reach its target  population either because, for example, low-income people are less likely  to take time out of the labor market to provide care for a family member.  Consequently, people who have relatively higher incomes may benefit  more from the creation of caregiver credits.
These policy options have costs that would place greater strains on the  Social Security trust funds, which are already projected to have  significantly depleted assets by 2033, at which time claimants would only  receive 77 percent of their entitled benefits. The cost each option might  impose varies depending on several factors, including: (1) the number of  additional beneficiaries that would become eligible, (2) whether other  additional adjustments—such as including a minimum work requirement  for divorced spouses—would be included, and (3) their potential to offset  the new costs.
The administrative burdens associated with implementing such changes  are also important factors. For example, caregiver credits would be  complex to administer due to the challenges associated with verifying that  care was provided to a qualifying person and the amount of care that was  provided.
section_title: The Shift Away from Defined Benefit Plans Also Increases the Economic Vulnerability of Elderly Spouses
paragraphs: The transition in private employer plan sponsorship from DB to DC plans  has increased the vulnerability of spouses due to differences in the level  of spousal protections between these retirement plans. While over half of  U.S. workers do not participate in employer-sponsored pension plans,  those with spouses who do participate may have different federal  protections depending on whether their spouse participates in a DB or DC  plan. In DB plans, current law requires spousal consent if the participant  wishes to waive the survivor annuity for his or her spouse. In contrast,  under DC plans, there is generally no federal requirement to provide an  annuity option and participants do not need spousal consent to withdraw  funds from the account—either before or at retirement. While spouses are  generally required to be the default beneficiary of the remaining account  balance upon the death of the participant, there is no protection against  the assets being invested unwisely, inadvertently spent down too quickly,  or simply withdrawn fully upon a job change and rolled into an IRA, with a  change in beneficiary. In a worst case scenario, the spouse who  participates in the DC plan could withdraw all the assets and spend them  in ways that do not provide for the couple’s retirement security. While the  increases in dual-earner couples and women’s coverage under DC plans  have the potential to mitigate these concerns by providing alternative  sources of retirement income, spouses with lower or no earnings may  remain vulnerable.
We identified these policy options for DB and DC plans through interviews and  consultations with retirement policy experts representing a range of perspectives and from  different types of organizations including government, academia, advocacy groups, and  the private sector. The listed options are not intended to be exhaustive and we are not  recommending or endorsing the adoption of any particular policy option. Rather, we  identify them as potential options for policymakers to consider, along with other relevant  proposals, as they address retirement security issues. could slow down the retirement process. For example, one expert  explained that DC plan benefit elections can be done electronically and in  a matter of days. In contrast, DB plan elections typically take about 30  days, in part because the pen and paper process of obtaining notarized  spousal consent in order to elect something other than a qualified joint  and survivor annuity (QJSA) holds up the process. Additionally, one  agency official we interviewed questioned the need for DC plans to adopt  spousal consent features, pointing out that spousal protections under DB  plans were instituted to protect nonworking spouses at a time when  women generally did not have the same level of access to and  participation in retirement plans as they do today.
Despite their relatively greater level of spousal protections, some policy  advocates have also proposed revising spousal provisions that apply to  DB plans. First, similar to the concern that the Social Security survivor  benefit amount is too low, one expert has suggested increasing the  minimum amount for DB survivor annuities from 50 percent to at least  two-thirds of the prior annuity amount. Such a change would help  surviving spouses better maintain their standard of living. However, such  a change would entail lowering the initial annuity amount, which may be a  hardship for some retirees and could deter some participants from  electing the QJSA. Another policy option would seek to remedy the  unequal treatment of widow(er)s under DB QJSAs. Typically, in a QJSA,  the amount of the annuity that the couple receives while both spouses are  alive does not change if the worker’s spouse dies first. In other words, the  worker would see no change in DB household income if widowed. On the  other hand, if the worker dies first, the annuity amount that the surviving  spouse receives may be reduced to as little as 50 percent of the prior  amount. To remedy this imbalance, two experts have suggested paying  the widow(er) a predetermined amount, regardless of which spouse dies  first. This “symmetric” joint and survivor annuity option is currently  available for plan sponsors to offer, but they generally have not done so.  Accordingly, one version of this policy option would be to make this option  the normal form of benefit for married participants, requiring spousal  consent to opt for a different form of payment. A symmetric joint and  survivor annuity has the advantage of requiring a smaller benefit  reduction on account of the survivor benefit than a standard joint and  survivor annuity, which could lead to more participants taking this option.  However, one agency official noted that employers expressed concern  that beneficiaries with this option might not report the death of their  spouse to avoid incurring any benefit reduction.
section_title: Concluding Observations
paragraphs: Over the last 50 years, major societal changes in the United States have  had important consequences for how Americans live, work, and save for  retirement. Indeed, unlike in decades past, fewer people are getting  married, and those who do often marry later in life and for shorter periods.  These trends have consequences for economic security because  unmarried individuals are unable to take advantage of the economic  benefits and efficiencies of marriage and may therefore be at greater risk  of poverty in old age. Moreover, these trends have disproportionately  occurred within the nation’s most vulnerable populations—low-income,  less-educated, and some minorities. If these trends continue, many  Americans’ economic security—both in their working years and in old  age—could further deteriorate.
While marriage rates overall have declined, the role women play in the  labor market has expanded. As a result, women have become major  contributors to household income and household retirement savings. For  many households, these gains could enhance economic security in old  age. However, low-wage workers who never marry or were not married  long enough to qualify for Social Security spousal benefits may not be  able to accrue sufficient retirement savings to offset the lack of a spousal  benefit in old age. Even within two-earner households, the Social Security  survivor benefit declines as earnings for both spouses become more  similar. Survivors are therefore likely to depend on other forms of  retirement income to maintain their standard of living prior to their  spouse’s death. Further, the shift to DC plans—which typically offer fewer  protections for spouses and fewer possibilities for participants to annuitize  within their plans—will likely result in more retirees outliving their assets.
These trends and their consequences raise important questions for  existing programs, such as Social Security, and current protections for  spouses in pension plans. As part of any future reform efforts in these  areas, it will be important for policy makers to consider these trends in  order to minimize poverty and ensure retirement security among the  elderly.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Department of Labor, the  Department of the Treasury, and the Social Security Administration for  review and comment. While none of the agencies provided official  comments, the Department of Labor and the Department of the Treasury  provided technical comments, which we incorporated as appropriate.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution until 30 days after the date of this  letter. At that time, we will send copies of this report to the Secretary of  Labor, the Secretary of the Treasury, and the Commissioner of Social  Security. In addition, the report will be available at no charge on GAO’s  website at www.gao.gov. If you or your staff have any questions about  this report, please contact me at (202) 512-7215 or jeszeckc@gao.gov.  Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this report. GAO staff who made  key contributions to this report are listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methods
paragraphs: To analyze trends in marriage and labor force participation and their  implications for retirement security, we examined: (1) the trends in and  status of marriage and labor force participation in the American  household; (2) how those trends have affected spousal benefits and  retirement savings behavior within households; and (3) what the  implications of these trends are for retirement security. This appendix  provides a detailed account of the information and methods we used to  answer these questions. Section 1 describes the key information sources  pertaining to analyses we conducted for each reporting objective.  Sections 2 and 3 provide additional information on the characteristics of  the individuals and households we analyzed for Objective 2.
subsections: section_title: Section 1: Information Sources
paragraphs: To address our objectives, we obtained information from a variety of  sources. We obtained and analyzed data from: (1) U.S. Census Bureau  (Census) and Bureau of Labor Statistics (BLS) reports; (2) the Integrated  Public Use Microdata Series (IPUMS) data consisting of decennial  Census data and American Community Survey data; (3) the Survey of  Income and Program Participation (SIPP) public use and restricted Gold  Standard data, (4) the Current Population Survey; (5) the Survey of  Consumer Finances (SCF); (6) SSA’s Modeling Income in the Near Term  model; and (7) SSA’s actuarial estimates. Table 3 summarizes the data  sources used to address each objective. To inform our data analyses for  all three objectives, we obtained additional information from (1) prior GAO  reports and the academic literature on trends in marriage, labor force  participation, and retirement income; (2) relevant federal laws and  regulations, and (3) a range of experts in the area of retirement security.  This section provides a description of the information sources, how we  used them, and the steps we took to ensure their reliability.
subsections: section_title: Census and BLS reports
paragraphs: To understand trends in marital status, single parenthood, and labor force  participation over time, which are reported in Objective 1 of the report, we  compiled and analyzed data from a number of published Census and BLS  reports. The data in these reports draw upon Census and BLS surveys  including: the U.S. Census Bureau, Current Population Reports; the  Survey of Income and Program Participation; and the Annual Social and  Economic Supplements, Current Population Survey.
section_title: Integrated Public Use Microdata Series (IPUMS)
paragraphs: To understand the relationship between income and education and trends  in marriage and single-parenthood from 1960 to 2010, in Objective 1 we  analyzed the Integrated Public Use Microdata Series (IPUMS). IPUMS  consists of more than fifty high-precision samples of the American  population drawn from fifteen federal censuses and from the American  Community Surveys of 2000-2011. Together these samples constitute a  rich source of quantitative information on long-term changes in the  American population. IPUMS assigns uniform codes across all the  samples and provides documentation for each data set.
In our analysis of IPUMS data (Figures 7 and 8), the data points for years  1960, 1970, 1980, 1990 and 2000 are from the decennial Census, and  data points for the year 2010 are from the American Community Survey.
subsections: section_title: Weights and Standard Error Calculations in IPUMS Data
paragraphs: For all our analyses of IPUMS data, we used person weights. To estimate  standard errors, we followed procedures recommended by IPUMS  methodological guidance papers. We applied the appropriate design  factors provided in Census Bureau publications for each year of data,  taking into account the population subsamples on which we conducted  our analysis.
section_title: Survey of Income and Program Participation
paragraphs: To answer parts of Objectives 1 and 2, we analyzed data collected  through the SIPP, a nationally representative survey conducted by  Census that collects detailed information on marital history and  caregiving, among many other areas. Specifically, we used the data to  analyze trends in (1) the characteristics of women that do not have a  marriage that would qualify them for Social Security spousal benefits and  (2) women’s time spent out of the workforce providing childcare. The  SIPP survey is conducted in a series of national panels, each of which is  collected for multiple years. Within each panel, the data are collected in a  series of “waves” which take place in 4 month cycles. Within each wave,  Census administers a core survey consisting of questions that are asked  at every interview, and several modules relating to a particular topic. We  used data from the core survey, the topical module on marital history, and  the topical module on employment history from two SIPP panels, the  1996 and 2008 panels. The 1996 panel, which was collected between  April 1996 and March 2000, contained approximately 40,000 interviews at  the beginning of the survey. The 2008 panel, which was collected  between September 2008 and December 2012, contained approximately  52,000 interviews at the beginning of the survey. For both panels, the  topical module on employment history was administered in Wave 1, and  the topical module on marital history was administered in Wave 2. In each  wave, we analyzed data from the fourth interview month. For the 1996  panel, the Wave 1 data was collected between March and June of 1996,  and the Wave 2 data was collected between July and October of 1996.  For the 2008 panel, the Wave 1 data was collected between August and  November of 2008, and the Wave 2 data was collected between  December 2008 and March 2009.
subsections: section_title: Weights and Standard Error Calculations in SIPP
paragraphs: For all of the SIPP analyses, we used SIPP individual-level weights to  compute point estimates. Because our analysis of the SIPP public use  data involves merging data for individuals from multiple waves, we chose  not to use SIPP replicate weights, as the replicate weight analysis  becomes complex and computationally burdensome under these  circumstances. Instead we used Stata’s survey data analysis package to  declare a survey design for the data, using the following survey design  variables from the SIPP data: GHLFSAM (half-sample code) to indicate  the primary sampling unit, and GVARSTR (variance stratum code) to  indicate the strata. GAO internal analysis has shown that using these  survey design variables yields estimated standard errors that are very  similar to those produced using the SIPP replicate weights.
section_title: SIPP Analysis of Women with Qualifying Marriages
paragraphs: To analyze the characteristics of women who had not attained a marriage  that would qualify them for Social Security spousal benefits, we used  information from the marital history modules of the 1996 and 2008 SIPP  panels. We classified a woman as attaining a qualifying marriage if she  either a) was currently married at the time of the survey, or b) was not  currently married, but had previously been in a marriage that lasted for at  least 10 years. We used data from the marital history module on the start  and end date of marriages to determine whether a marriage had lasted at  least 10 years. Because the public use data does not contain the month  of marriage, we could not know precisely how long each person had been  married. For women whose marriages were close to the 10-year mark, we  had to choose between making our classification err on the side of overly  inclusive or overly exclusive. We chose to define a marriage as lasting at  least 10 years if the difference between the year of marriage termination  and the year of initiation was at least 11. This means that we did not  include any women whose marriage was less than 10 years. However,  we did exclude some women whose marriage was exactly 10 years. For  example, a woman who married in January 2000 and divorced in  February 2010 would have a 10 year marriage, but our classification  excluded her. We made this choice to avoid incorrectly including women  with marriages less than 10 years. For example, if we defined our  classification using the rule that the difference between the termination  date and the start date was 10 years, we would include women who  married in December 2000 and divorced in January 2010—a marriage  that lasted 9 years and 2 months.
We analyzed the characteristics of men and women who had attained a  marriage that would qualify them for Social Security spousal benefits by  comparing qualifying marriage rates across different demographic groups  (specifically, across different age, racial and ethnic groups, education  level, and income categories.) In addition, to examine whether the  relationship between race and qualifying marriage rates remained when  controlling for income and education, we also ran several multivariate  regressions on women age 55-64. We ran probit regressions of the  probability of attaining a qualifying marriage for women on race with  controls for income and education. We also ran probit regressions of the  probability of attaining a qualifying marriage on race interacted with  income, and on race interacted with education. These regressions show  the negative relationship between a person being in the “black” race  category and attaining a qualifying marriage remains statistically  significant, even with controls for income and education, in both 1996 and  2008. Similarly, we ran probit regressions of the probability of being  currently married on race with controls for education and income, and we  also ran probit regressions of the probability of being currently married on  race interacted with income, and on race interacted with education, for  women age 55-64 in 1996 and 2008. These regressions show that the  negative relationship between a person being in the “black” race category  and being currently married remained significant with controls for  education and income.
section_title: SIPP Analysis of Time Spent Out of the Workforce to Provide Childcare
paragraphs: To analyze women’s time spent out of the workforce providing childcare,  we used data from the 2008 SIPP employment history module, combined  with data from the fertility history module. We used the fertility history  module to obtain information about whether an individual had ever had a  child. This was necessary because we were looking at a person’s lifetime  employment, and many older people who have taken time out of the  workforce for childcare in the past do not currently have children living  with them. We restricted this analysis to women age 20-62 who had  worked for at least 6 months prior to the birth of their first child. We set  this age range because the SIPP “time off for caregiving” questions were  only asked for people in this age range. We also restricted the analysis to  women whose first child was born in 2004 or earlier. This restriction was  made so that all women in the analysis would have given birth at least 4  years before the survey interview. We then examined the length of time  women took out of the workforce, during their first spell out of the  workforce. We restricted our analysis to the first spell out of the workforce  in order to mitigate the impact of older women being more likely to have  had multiple children, and therefore multiple spells out of the workforce,  compared to younger women. We created five categories for time spent  out of the workforce. The top category was “4 or more years”. We made  this the top category so that all women in the analysis were interviewed at  least 4 years since the birth of their first child, and therefore would have  had the opportunity to have taken off 4 or more years.
section_title: SIPP Analysis Comparing Characteristics of Female Beneficiaries
paragraphs: For our analysis in Objective 2 comparing the characteristics of women  who receive Social Security spouse-only benefits with those receiving  retired-worker benefits or dually-entitled spouse benefits, we used the  2008 SIPP restricted-use Gold Standard data. We used the Gold  Standard SIPP data because, despite its advantages, the SIPP public- use data has one main limitation for our analysis. As with most survey  data, SIPP public-use data are self-reported. This can be problematic for  the reporting of data on income sources and the type of Social Security  benefits individuals receive. For example, respondents might incorrectly  report that they receive a spousal benefit, when in fact they are receiving  a retired-worker benefit. To mitigate this problem, we used the 2008 SIPP  Gold Standard data. Census created this file by extracting variables from  the SIPP panels conducted in 2008 and merging SSA-provided  administrative data including the Summary Earnings Records, Detailed  Earnings Records, and the Master Beneficiary Record. Census refers to  these data as the Gold Standard because they represent the available  confidential micro-data that would be used for analysis by an authorized  researcher working in a restricted-access facility.
section_title: Survey of Consumer Finances
paragraphs: To answer part of Objective 2, we analyzed data from the 2010 SCF.  Specifically, we used the data to analyze (1) the decision to opt out of a  survivor benefit among married households with pension income, and (2)  retirement savings behavior among married and single-headed  households. The SCF is a triennial, nationally representative survey from  the Board of Governors of the Federal Reserve System (Federal  Reserve). The 2010 SCF surveyed 6,482 households about their  pensions, incomes, labor force participation, asset holdings and debts,  use of financial services, and demographic information. For the purposes  of this report, a household refers to the primary economic unit within a  household, which the SCF refers to as a family. To estimate the age,  marital status, net worth, income, and participation in a DC or DB plan,  we relied on variable definitions used for Federal Reserve publications  using the SCF and consulted with an agency official.
To analyze the decision to opt out of a survivor benefit, we conducted  both comparisons of means and cross-tabulations, and ran some simple  regression analyses using the SCF. Our regression analyses were logit  models which predicted the probability of a person choosing a survivor  benefit as a function of net worth and total retirement liquid assets (in  separate regressions). In our regression of survivor benefit choice on net  worth, we grouped net worth into quartiles, and constructed categorical  variables for each quartile. We included retirement liquid assets as a  continuous variable.
The SCF is subject to non-sampling error and non-response, which can  influence the accuracy of point and variance estimates. To address this,  the Federal Reserve provides a set of implicate data—which contain  information about imputed variables—and a replicate weight file, which  permits users of the SCF microdata to obtain more accurate variance  estimates. We followed Federal Reserve guidance and used both the  implicate data and the replicate weights when constructing our point  estimates and standard error estimates, both in our univariate analyses  and in our regression analyses.
section_title: Modeling Income in the Near Term
paragraphs: To project the distribution of Social Security beneficiary types for women  into the future for Objective 3, officials from the Office of Retirement  Policy at the Social Security Administration (SSA) provided GAO with  projections based on simulations they conducted with the Modeling  Income in the Near Term model, Version 6 (MINT6). This model is used  to make projections related to individuals’ retirement income, marital  trends, Social Security benefits, and poverty. The MINT6 is built from  Census survey data and Social Security’s own administrative records.
section_title: Social Security Actuarial Estimates
paragraphs: The Office of the Chief Actuary at the Social Security Administration  provided GAO with the data used in Objective 3, figure 20, which  presents examples of Social Security Retirement and Survivor Income  benefit levels for households with different hypothetical earnings  configurations (i.e. one-earner couples, dual-earner couples with unequal  earnings, and dual-earner couples with equal earnings).
section_title: Sampling Error
paragraphs: Estimates from the surveys described above are subject to sampling error  because these surveys are probability samples based on random  selections. Since each possible sample could have provided different  estimates, we express our confidence in the precision of the sample  results as 95 percent confidence intervals. These intervals would contain  the actual population values for 95 percent of the samples that could have  been drawn. In this report, we report all percentage or other numerical  estimates along with their 95 percent confidence intervals. In addition,  any differences between point estimates presented in this report are  statistically significant at the 95 percent confidence level unless otherwise  noted.
section_title: Data Reliability and Limitations
paragraphs: For the IPUMS, SIPP public-use and Gold Standard data, SCF and  MINT6 data described above, we conducted a data reliability assessment  of selected variables by conducting electronic data tests for completeness  and accuracy, reviewing documentation on the dataset, or interviewing  knowledgeable officials about how the data are collected and maintained  and their appropriate uses. When we learned that particular fields were  not reliable or were not consistently reported, we did not use them. For  the purposes of our analysis, we found the variables that we ultimately  reported on to be sufficiently reliable.
Nonetheless, our analysis of nationally representative survey data had  several limitations. The SCF and other surveys that are based on self- reported data are subject to several other sources of non-sampling error,  including the inability to get information about all sample cases; difficulties  of definition; differences in the interpretation of questions; respondents’  inability or unwillingness to provide correct information; and errors made  in collecting, recording, coding, and processing data. These non-sampling  errors can influence the accuracy of information presented in the report,  although the magnitude of their effect is not known.
We also encountered limitations specific to our study. First, in using the  2008 SIPP Gold Standard Data to analyze the characteristics of female  Social Security beneficiaries, we were unable to analyze information for  approximately 6 percent of the female respondents age 62 and over who  did not provide their Social Security numbers because Census uses the  SSN to match the information respondents provide in the SIPP survey  with the information from administrative files. Second, in using the SCF  to evaluate changes in the retirement savings behavior of households, we  were unable to analyze the decisions of households to opt out of the  survivor benefit prior to 2001 due to changes in the SCF questionnaire. In  addition, in using the SCF to analyze near-retirement households, we  widened the age range we examined from 55-64 to 50-64 in some  instances to improve the precision of our estimates.
section_title: Literature Review and Interviews
paragraphs: To gain an understanding of the trends in marriage and labor force  participation and their implications for retirement security, we conducted  an extensive literature review and interviewed a range of experts. To  identify existing studies, we used online research software to search  through databases of scholarly and peer-reviewed materials for  information on these topics, including articles, journals, reports, and  studies dating back to 2002. In addition, we reviewed articles that were  collected during the previous GAO study on women’s retirement security  that contained relevant information and reviewed articles that were  suggested to us by the experts we interviewed. The articles we cited in  the report were reviewed for methodological adequacy by at least two  GAO analysts with expertise in social science methods.
To supplement the literature review, we conducted interviews with  experts. To ensure that we obtained a balanced perspective, we  interviewed 49 experts with a range of perspectives and from 21 different  types of organizations including government, academia, advocacy  groups, think tanks and industry. We also consulted several of these  experts on technical issues related to our analysis. We identified and  interviewed experts who have specialized knowledge about spousal  protections and retirement security in a specific area of expertise (e.g.,  law or social science), or who were recommended by one or more people  or groups we had previously interviewed. Specifically, we interviewed  federal agency officials at the Departments of the Treasury and Labor, the  Social Security Administration, the Census Bureau, and the Office of  Management and Budget; academic experts and subject-matter experts  at Drexel University, the Employee Benefit Research Institute, Syracuse  University, and the Urban Institute; and industry experts and advocates  from AARP, the American Benefits Council, Global Policy Solutions, the  Institute for Women’s Policy Research, the Investment Company Institute,  Mercer, the National Women’s Law Center, the National Gay and Lesbian  Task Force, the National Hispanic Council on Aging, the Pension Rights  Center, and the Women’s Institute for a Secure Retirement.
To identify the policy options that may address retirement security issues  under Social Security and private employer-sponsored plans, we  reviewed past GAO reports and interviewed experts. For the Social  Security options, we reviewed GAO’s prior work in this area.selected options that focus on either spousal or survivor benefits or, more  broadly, on elderly populations that are vulnerable to poverty. We  identified policy options that would seek to address spousal protections in  private employer-sponsored DB and DC plans through interviews with  retirement policy experts representing a range of perspectives and from  different types of organizations including government, academia,  advocacy groups, and the private sector. The Social Security, DB, and  DC policy options listed in this report are not intended to be exhaustive  and we are not recommending or endorsing the adoption of any particular  policy option. Rather, we identified them as potential options for  policymakers to consider, along with other relevant proposals, as they  address retirement security issues. In addition, for this report, we did not  conduct an independent analysis of the potential legal effects of these  policy options.
section_title: Section 2: Analysis of the Characteristics of Social Security Spousal Beneficiaries
paragraphs: To compare the characteristics of female Social Security beneficiaries in  Objective 2, we used a sample of beneficiaries from the SIPP Gold  Standard data set. Table 4 provides descriptive information on the  population of the beneficiaries we analyzed by categories of beneficiaries,  including (1) all female Social Security beneficiaries (including widows);  (2) retired-worker, non-widow beneficiaries; (3) spouse-only beneficiaries;  and (4) dually-entitled workers. We removed the widows from the sample  of retired workers so that we could compare a similar set of female  beneficiaries (i.e. all non-widows).
Table 5 provides information on the wealth and income characteristics of  all female Social Security beneficiaries that were married at the time of  the survey. Again, by restricting the sample to women who are in similar  life circumstances (i.e. married), we can obtain a more accurate picture of  the wealth and income levels of spouse-only beneficiaries (who are by  definition married), relative to their married counterparts in the retired- worker and dually-entitled categories.
section_title: Section 3: Analysis of the Characteristics of Married Households that Opt Out of Survivor Benefits
paragraphs: To understand the characteristics of married households that opt not to  receive a survivor benefit for Objective 2, we analyzed a sample of  married households currently receiving pension income from the SCF  data. To identify these households, we used three questions from the  SCF survey. Specifically, we selected households that:
Responded to “Is anyone in the household receiving pension benefits  currently?” with “Yes”;
Responded to “Is this pension currently an account plan, such as a  401(k), where you could take the whole balance as one payment if  you wanted to?” with “No;” and
Responded to “Is this a payment or account from a current job, past  job, a disability or military benefit, former spouse’s pension, or  something else?” with either “Current job pension of respondent or  spouse/partner,” “Past job pension of respondent or spouse/partner  (except military)” or “Disability.”
Among the households that are currently receiving pension benefits, we  identified households that opted for a survivor benefit by using an  additional question from the SCF survey. Specifically, we selected  households that:
Responded to “If you were to die, what percent of this current  retirement payment would your spouse/partner continue to receive?”  with “Start at a later time, no indication of reduced benefit,” “Start at a  later time, indication of reduced benefit,” “Lump sum payout,” “Full  amount for limited period,” “Full amount, no time limit or time period  not specified,” or “other.”
To ensure that we categorized these households appropriately, we  consulted an official at the Federal Reserve.
Table 6 presents descriptive information on the characteristics of married  households currently receiving pension income (presented in the third  column) as well as on all households currently receiving pension income  (presented in the middle column).
To understand the savings behavior of working-age households for  Objective 2, we analyzed a sample of working-age households from the  SCF data. Table 7 presents descriptive information on all of the working- age households and married households in this sample.
section_title: Appendix II: Selected Social Security Policy Options That May Offset Effects of Changes in Marital Patterns
paragraphs: This appendix provides a summary of Social Security policy options,  suggested by experts and cited in past GAO reports, to improve the  retirement security of vulnerable populations. The options listed are not  intended to be exhaustive, and each selected policy option may include  multiple proposals. In this report, we are not recommending or endorsing  the adoption of any particular policy option. Rather, we identify them as  potential options for policymakers to consider, along with other relevant  proposals, as they address retirement security issues. Table 8 presents  options that focus specifically on modifying benefits for spouses and  survivors. Table 9 presents other options that would affect broader  populations of vulnerable individuals, including those who do not qualify  for spousal or survivor benefits, such as the never-married.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: Michael Collins, Assistant Director; Jennifer Cook, Erin M. Godtland,  Rhiannon Patterson, and Ryan Siegel made significant contributions to  the report. In addition, James Bennett, Benjamin Bolitzer, Michelle Bracy,  Amy Buck, David Chrisinger, Sarah Cornetto, Hedieh Fusfield, Maria  Gaona, Mark Glickman, Jennifer Gregory, Kathy Leslie, Gene  Kuehneman, Courtney LaFountain, Avani Locke, Grant Mallie, Ashley  McCall, Sheila McCoy, Thomas McCool, Liam O’Laughlin, Carol D.  Petersen, Mark Ramage, Marylynn Sergent, Frank Todisco, and Shana  Wallace made valuable contributions.